Unemployment Rate Climbs to 8.9 Percent
In most states, individuals who lose their jobs through no fault of their own are entitled to collect unemployment compensation benefits for the applicable benefit period or until they find a new job, whichever is less. Typically an employee who quits a job does not qualify for unemployment benefits; however, if the job resignation was the result of an employers harassment, discrimination, threats, or hazardous working conditions then the employee may qualify for an unemployment benefits claim.
New unemployment claims rose more than expected last week to a seasonally adjusted 637,000 due to auto layoffs, the Labor Department said Thursday. A separate report showed that wholesale prices rose a bigger-than-expected 0.3 percent in April, reflecting a big surge in food costs.
The number of people continuing to receive unemployment benefits set a record for the 15th straight week. The number of people requesting benefits rose to a seasonally adjusted 637,000, from a revised 605,000 in the previous week. That’s above analysts expectations of 610,000.
Although employers slashed fewer jobs in April than they had in six months, that didn’t mean that they were hiring new workers. The economy lost another 539,000 jobs in April, bumping the unemployment rate up to 8.9 percent, the highest in 26 years, according to the Labor Department report released Friday. As a result, the unemployment rate climbed from 8.5 percent to 8.9 percent, the Labor Department reported this morning. If the underemployed and those who have given up searching for jobs were included, the rate would be 15.8 percent.
Some unemployed workers have become so frustrated by the difficulty of landing a job that they’re exiting the labor market altogether. Prior recessions saw a spike in the number of women choosing to be stay-at-home moms rather than continue to compete for work. This recession has seen a large spike in the number of laid-off men opting to become stay-at-home dads — or at least stay at home. Once people stop looking for work, they’re no longer entitled to unemployment benefits.
Unemployment to worsen?
The employment situation on the horizon looks even worse. Typically, unemployment peaks six months to a year after the economy starts to recover. So, even if the recent stock market rally is a harbinger of economic recovery, that doesn’t mean that unemployment rates will fall soon. Nor is an economic recovery a guarantee that unemployment will drop below 4%, as it did during the boom in 2000. The way some economists see it, the U.S. has entered a downward spiral that could result in higher unemployment for the foreseeable future.
The way some economists see it, the U.S. has entered a downward spiral that could result in higher unemployment for the foreseeable future.
Have you or someone you know been denied unemployment compensation after losing a job? If so, contact our Unemployment Lawyers today!