Uber driver picks up customers.
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Self-employed and gig workers applied for unemployment benefits last week at half the level of the previous week, according to Labor Department data on Thursday.
This points to a strong recovery that broke off from consistently high – even rising – values in recent weeks.
But that upswing likely did not occur. It only happened on paper, experts say.
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Initial requests for assistance with pandemic unemployment – a temporary federal program that benefits Gig and other ineligible workers – fell to around 161,000 last week. In the week before, around 310,000 employees applied for PUA benefits.
Economists and unemployment experts have provided some explanations as to why the decline has occurred.
The sharp drop is likely related to the timing of a recent $ 900 billion aid package from Covid, administrative outages between states, and worker behavior.
This also happens against the background of persistently high benefit claims in other unemployment programs. In total, more than 1 million Americans asked for help last week.
“The 50% decrease in initial filings is not at face value,” Elizabeth Pancotti, policy advisor at Employ America, a progressive group, said on Twitter.
Why the drop?
The Aid Act extends the PUA program by 11 weeks until mid-March. It was supposed to expire the day after Christmas. President Donald Trump signed the legislation in late December after nearly a week’s delay, but that signature likely didn’t come in time for many workers to avoid at least a brief loss of performance.
As a result, the program has been temporarily unavailable for many workers, the experts said.
Many workers also likely did not claim benefits as it was not clear whether additional weeks of benefits were available.
“There was a lot of uncertainty about whether PUA would be renewed, which could affect applicants’ behavior,” said AnnElizabeth Konkel, an economist on site.
Experts generally agree that the data is a slip up and that states will change the data in the next week, which would almost certainly increase the number.
Many states – Arkansas, Colorado, Delaware, Florida, Indiana, Minnesota, Ohio, and Wyoming – reported no initial application dates at all for the PUA program in the week ending Jan. 2, more than 100,000 the week before, according to the Department of Labor.
Other states like Illinois, Kentucky and Louisiana reported a total of only 75 claims – tens of thousands fewer than at the end of December.