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New claims for unemployment insurance totaled 444,000 in the most recent week, the U.S. Labor Department reported, the lowest number in 14 months.
The number of people collecting jobless benefits from all state and federal programs fell to 16 million as of 1 May from 16.9 million the previous week, also the fewest since the crisis began in March 2020.
The lower numbers were reported as Republican governors in 22 states are preparing to end the $300 weekly federal unemployment supplement for jobless persons in their jurisdictions, cutting total benefits by half or more for 3.7 million people, according to Oxford Economics.
The supplemental payment will be available through September but the 22 states will cut them off at some point from mid-June through mid-July, claiming that the extra money is robbing employers of potential workers.
The average weekly state unemployment benefit is $318, according to the U.S. Labor Department. Added to the $300 federal grant, the out-of-work payment exceeds the wages earned by working a 40-hour week at $15 an hour.
However, many states cutting off the federal benefit pay well below the $318 weekly average. Mississippi, which will end the federal payment in mid-June, pays an average of $195 in weekly jobless compensation.
The $300 federal check has had “small but noticeable effects on job search and worker availability in early 2021,” according to preliminary findings of a study by the Federal Reserve Bank of San Francisco.
At the start of each month this year, if seven of every 28 workers were offered a job, only one of the seven would decline it because of the federal payment, the study calculated.
The $300 federal stipend is only one reason keeping people off the job. Low-wage workers may lack transportation or affordable child care; some still fear catching the COVID virus, analysts point out.
TRENDPOST: As we have noted, a person making $15 per hour going to work makes the same staying home when receiving government benefits. President Biden has defended the federal unemployment payments but has insisted that anyone offered a job must take it.
The dearth of workers is nudging up wages; the average hourly pay had gained 5.8 percent in April compared to February 2020, the NYT reported.