Weekly Arkansas jobless claims spike to almost 9,000; U.S. claims set new record

Initial jobless claims in Arkansas for the week ending March 21 were 8,958, more than six times the 1,382 in the previous week. Jobless claims nationwide totaled 3.283 million, a huge increase over the 282,000 in the previous week. The nationwide tally set a new record for the report.

The previous high was 695,000 in October 1982, and the 4-week moving average was 998,250, an increase of 765,750 from the previous week’s revised average, according to Thursday’s (March 26) U.S. Department of Labor report.

The dramatic rise in claims is the direct result of responses to efforts to contain the spread of COVID-19, which include the closure of non-essential businesses and social distancing measures that have essentially shut down many service sector and tourism-based businesses.

COVID-19 cases in Arkansas rose from 280 on Wednesday to 335 as of early afternoon on Thursday. There were two deaths reported Tuesday, with a third death reported Thursday. As of Thursday at 2 p.m., there were 76,514 U.S. cases and 1,093 deaths. Globally, there were around 511,603 cases and more than 23,000 deaths.

Among the largest populated states, California had 186,809 new claims, up 224%; Texas had 115, 657 new claims, up 862%; Illinois had 114,663 new claims, up 955%; and Florida at 74,021 new claims, up 1,045%.

“This large increase in unemployment claims was not unexpected, and results from the recognition by Americans across the country that we have had to temporarily halt certain activities in order to defeat the coronavirus,” U.S. Secretary of Labor Eugene Scalia said in a statement.

Scalia said recent actions by Congress will help those facing unemployment, including “unprecedented funding” unemployment insurance and one-time cash payments to families.

“Perhaps more important, the Senate bill also provides incentives and funding for businesses to keep their workers on payroll, so that, as soon as possible, we can spring back to the strong economic conditions we enjoyed just weeks ago,” he said.

In their report for Heartland Forward, a Bentonville-based think tank focused on economic renewal, Dave Shideler and Jonas Crews said the increase in claims are also results of relaxed state and federal rules that allow more people to file for claims, and to file sooner than normal. The researchers also said the trend of future claims may indicate how many workers are incentivized to file for claims.

“As Congress puts the finishing touches on the 3rd phase of economic stimulus legislation, we will be watching closely how UI claims trend over the coming weeks. On one hand, this week’s claims level is not sustainable simply because there is a limit to how many workers qualify and receive benefits. However, the anticipated expansion of benefits could induce more workers to apply for benefits, especially for self-employed and contract employees who were previously ineligible for UI benefits.”