New unemployment claims in North Carolina approach 50,000 this week
The number of North Carolinians who have filed for unemployment this week is approaching 50,000, as coronavirus closures rattle the service and hospitality industries.
Approximately 42,000 people filed for unemployment between Monday and Friday at 8 a.m., said Kerry McComber, a state Commerce Department spokeswoman, and almost all of them listed COVID-19 as the reason.
Media reports from around the country show that hundreds of thousands of people have lost their jobs in the last few days. President Donald Trump’s administration reacted by asking states to stop giving the public detailed updates, The Wall Street Journal and The New York Times reported Thursday.
An email sent from a federal official to state officials “said jobless claims are closely watched by policy makers and financial markets” and “asked states to keep the numbers embargoed,” the Wall Street Journal reported.
North Carolina officials are aware of that but plan to continue providing unemployment numbers, McComber said Friday.
Michael Walden, an N.C. State University economist, said he’s not sure why the Trump administration would want to stop people from knowing as much as possible about the economic fallout. Leaders need to be making informed decisions about how to respond, he said.
“In my opinion, the numbers are important to follow because they give us one of the clearest measures of the economic impact of the virus,” Walden wrote in an email. Friday. “They are also important for policymakers as they have ongoing deliberations about the level and type of federal help needed in the economy.”
In North Carolina, at least some members of the General Assembly’s Republican majority have called for cash payments to be made to all state residents, in an effort to stave off a recession and help people make ends meet. There are also now low-interest loans in place for small businesses, the tax filing deadline has been extended, and lawmakers are looking at other ideas too, The News & Observer reported Friday.
North Carolina has among the lowest unemployment benefits of any state in the country. But earlier this week Republican Senate leader Phil Berger said there is a $4 billion budget surplus in the unemployment fund, and that it exists “for times like this.”
Congress is also expected to work on a relief package that would apply nationwide. Walden said he is in favor of fast action, and lots of it, from the government.
“My view is we need aggressive action on all fronts,” he said, naming ideas like cash payouts to families, Federal Reserve aid for Wall Street, bailouts for small businesses and more.
“Yes, money will be printed and government borrowing will swell, but the payoff is an economy that hopefully will largely be intact after the virus is ended,” he said.
Possibility for a recession?
On Tuesday, North Carolina Gov. Roy Cooper ordered bars and restaurants to close, except for takeout and delivery. He also previously had banned gatherings of more than 100 people. That essentially shut down concerts, festivals, conferences and other events key to the hospitality and service industries.
The 42,000 North Carolinians to file for unemployment in the last few days is astronomically higher than normal. In all of February, around 11,000 North Carolinians filed for unemployment, federal data shows. In January, the state had around 19,000 claims total.
On Tuesday, when Cooper ordered bars and restauants to close, he also issued a temporary change to the rules for unemployment benefits. The new rules make it easier for people to qualify and to keep receiving the benefits once they do qualify. The new rules also don’t make businesses help pay for their laid-off workers’ benefits, as is normal.
Cooper said the goal behind the changes was to help people get help now, and to hopefully help businesses be in a better position to reopen and rehire staff in the future, once the pandemic has subsided.
“We know that people want to work and businesses want to stay open,” Cooper said Tuesday. “The reality is many can’t.”
Walden said there are numerous forecasts for how many jobs might ultimately be lost due to coronavirus, and in North Carolina it could eventually be as high as 150,000 people out of work, depending on how bad things get.
But he said the good news is that “most economists think the resulting recession will be short-lived,” lasting roughly six months. After that, he said, “a major bounce-back is expected because the economy was strong going into the recession, and because there will be much ‘pent-up demand’ released when workers and consumers return to normal.”
The New York Times reported Thursday that unemployment claims spiked 30% this week, “one of the largest spikes on record.”
And while North Carolina’s unemployment numbers are rising quickly, they are still relatively good news compared to some other states.
In Pennsylvania 50,000 people filed for unemployment just on Monday, the Philadelphia Inquirer reported. And Ohio had more than 110,000 people file for unemployment between Monday and Thursday, the Associated Press reported.
Both Ohio and Pennsylvania have several hundred thousand more workers in total than North Carolina does, according to data from the Federal Reserve Bank. And both in Ohio and in Pennsylvania the mandatory business closures have been stricter and more expansive than in North Carolina so far, local media reports show.
This story was originally published March 20, 2020 at 3:45 PM.
