Unemployment benefit applications have dropped this year in wake of extension crisis
Unemployment benefit applications fell last week by 2,000, bringing the seasonally adjusted amount to 312,000. However, the four-week average of benefit applications rose by 2,000 to a seasonally adjusted rate of 314,000.
The average as a whole has dropped by 9 percentage points so far this year, which shows that companies are cutting fewer jobs from their payrolls.
While benefit applications are on the decline, the number of people receiving unemployment payments in America rose by 12,000 to 2.57 million. The number of people receiving benefits is still near a six-year low though.
“The figures come a day after the government said the economy shrank at a 2.9 percent annual rate in the first three months of the year, the worst reading since early 2009, when the U.S. was mired in the depths of the recession,” reports the Associated Press.
Many economists have blamed the dismal economic performance of the U.S. on the unusually harsh winter weather experienced earlier this year. The fact that employers have not increased layoffs shows that the retraction of the economy is not due to an oncoming recession.
217,000 jobs were added in May of this year, which is the fourth straight month of job growth over 200,000. May’s significant job numbers means that the U.S. is currently in the biggest job growth streak since 1999.
The unemployment rate was stagnant at 6.3 percent, not great, but still the lowest level seen in more than five years.
The economy is expected to grow at a 3.5 percent annual rate or more in the quarter ending in June. The second half of the year will bring about a 3 percent growth rate, according to analysts.
While applications for unemployment benefits fell last week and hiring is at a high point right now, many Americans are feeling the strain of their benefits running out with no extension or back pay coming anytime soon.
Republicans and Democrats cannot come to an agreement on the metrics surrounding a proposed extension of benefits and back pay for people whose benefits ran out late last year.
In the midst of the financial crisis, Congress voted to increase unemployment benefits to 99 weeks, but it was eventually cut down to 73 weeks last year.
Currently, the federal unemployment benefits program provides those who lose their jobs with 26 weeks of payments.
So while the timeframe of unemployment benefit payments has lowered as the economy improves, there are still 3 million people out there whose benefits ran out.