Indiana reports big spike in weekly unemployment claims

The number of laid-off workers seeking unemployment benefits remained stuck at 1.3 million last week, a high level that indicates many companies are still cutting jobs as the viral outbreak intensifies. Meanwhile, initial claims in Indiana jumped 31%.

The Labor Department’s Thursday report showed that applications for jobless aid fell by about 10,000 nationally from the previous week. The figure has now topped 1 million for 17 straight weeks. Before the pandemic, the record high for weekly unemployment applications was nearly 700,000.

The total number of people who are receiving jobless benefits dropped 400,000, to 17.3 million, the government said. That suggests that some companies are continuing to rehire workers, which could offset some of the job losses reflected in the still-high level of claims.

In Indiana, 29,037 people filed initial unemployment claims in the week ended July 11. That’s up from an adjusted number of 22,102 the previous week. Prior to the pandemic, the state was typically seeing fewer than 3,000 claims per week.

After peaking at more than 146,000 initial claims in late March, weekly claims had been declining in Indiana during the pandemic until showing several weekly increases in June. Big spikes in claims late in the month were attributed partly to organized fraud that had previously struck several other states. Initial claims then fell dramatically in the state in last week’s report.

A total of 190,024 people were receiving unemployment benefits in Indiana as of July 4, the Labor Department said Thursday. That was down from 183,968 the previous week.

Thursday’s report also showed that an additional 928,000 people applied for jobless benefits nationally last week under the new Pandemic Unemployment Assistance program for self-employed and gig workers. That was down from just more than 1 million the previous week.

Indiana reported 41,088 new recipients for the PUA program in the week ended July 11 after reporting no new claims the previous week while it investigated potential fraud.

The state reported 105,809 people were receiving continued PUA aid as of June 27, down from 279,532 the prior week.

Indiana Department of Workforce officials said scammers targeted the PUA program particularly hard in late June. The DWD said it was putting “holds” on, and investigating, many PUA claims before clearing them for payment.

PUA provides up to 39 weeks of unemployment benefits to individuals not eligible for regular unemployment compensation or extended benefits. Those include the self-employed, independent contractors, gig economy workers and workers for certain religious entities.

Nationally, the high level of applications for jobless aid is occurring as new confirmed cases of coronavirus are spiking across much of the Sunbelt, threatening to weaken the economic recovery. Case counts are rising in 40 states, and 22 states have either paused or reversed their efforts to reopen their economies, according to Bank of America.

The resurgence of the virus and new business shutdowns in states such as Florida and California, along with signs that consumers are pulling back from eating out and other activities, has intensified fears that the economic recovery is losing steam.

The government’s employment report for June showed a solid gain of 4.8 million jobs and an unemployment rate that fell to 11.1% from 13.3%.

But economists increasingly doubt that such a pace can be sustained. The number of employees working at small businesses declined last week, particularly in states with worsening viral outbreaks, according to data from Homebase, a company that makes scheduling and work-tracking software.

“The risk of a dip lower in the economy has increased as more states adopt policies to combat the virus spread,” economists at Bank of America said in research note. “Until the country manages to get the virus under control, the recovery is likely to be one of fits and starts.”