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Economic experts expecting record-high unemployment rate for April as claims keep falling, but remain high

Despite decreasing unemployment claims week over week, regional economics experts still are expecting record-high unemployment rates for April.

Illinois residents filed 74,476 claims for unemployment benefits last week, according to final numbers from the Illinois Department of Employment Security released Thursday. That’s an about 9% decrease from the revised total of 81,596 for the week ending April 25, per state data.

Last week’s total in Illinois was a 63% decrease from the 201,041 total for the week ending April 4, per state data. Total weekly initial filed unemployment claims statewide that were related to COVID-19 started decreasing from that point.

The state update comes as the U.S. Department of Labor announced Thursday that more than 3.1 million people filed for unemployment benefits last week, which was 677,000 less from the week ending April 25. That brings the total number of claims nationwide to more than 30 million within the past seven weeks due to the COVID-19 crisis.

Carl Campbell, economics professor and department chair for Northern Illinois University, had said the earlier claims surge came after people lost their jobs after Illinois Gov. JB Pritzker’s stay-at-home order in March. A lot of businesses – like restaurants and bars – had to close its doors to dine-in patrons. He had said businesses that were ordered to close would have closed by late March or early April.

Seven days into May, Campbell said he thinks the worst likely has happened, but experts will have a better idea once national figures for April are released on Friday.

“I wouldn’t be surprised if [the national unemployment rate] would be over 20%,” Campbell said.

Illinois was not among the states with the largest increases or decreases in initial claims for the week ending May 2, nor was it among states with the highest unemployment rates within the country for the week ending April 25, according to the U.S. Department of Labor.

However, Illinois received more than 1 million initial unemployment claims from March 1 through May 2, according to a Thursday IDES news release. That’s double the total number of initial claims for all of 2019 – which was more than 476,000 – and nearly six times the amount of claims filed in the first two months of the 2008 Great Recession, per state data.

If that predicted national unemployment rate for April comes true, Campbell said, it would be the highest it would have been since the Great Depression. He said the previous maximum unemployment rate post-Great Depression was 11% in the early 1980s.

Campbell said he thinks the unemployment rate is going to keep coming down slowly but it will still remain high until treatments and vaccines become publicly available and people “feel like they can go to stores and public gatherings safely.”

IDES officials said in an April 16 news release the unemployment rate rose to 4.6% in March, following a record low at 3.4% in February. There were nearly 292,300 civilians who were out of work in March and more than 6 million employed, according to state and federal data.

However, state and federal data focuses on full-time workers and, since many part-time workers may not be eligible for unemployment, it’s difficult to know exactly how many workers also are unemployed currently.

State employment security officials said Tuesday a new application portal will open on Monday through the agency’s website for workers who receive 1099 tax forms – otherwise called independent contractors – and have lost work due to COVID-19.

Rebecca Cisco, spokeswoman for the Illinois Department of Employment Security, wrote in an email on Thursday those workers should first file for regular unemployment before filing for the state’s Pandemic Unemployment Assistance, or PUA, program.

“Being denied regular benefits is the first step in determining eligibility for a PUA claim,” Cisco wrote.

To file an unemployment claim through the State of Illinois and to view instructions on how to do so, visit www2.illinois.gov/ides.

In April, there were 372,220 unemployment claims filed within the Shaw Media Illinois coverage area in northern Illinois, according to by-county unemployment data from the state. That amounted to a nearly 27% increase in total filed unemployment claims in April from March within northern Illinois, including Bureau, Carroll, Cook, DeKalb, DuPage, Grundy, Kane, Kendall, Lake, La Salle, Lee, McHenry, Ogle, Putnam, Whiteside and Will counties.

Putnam County saw the largest percentage increase – nearly 51% – in filed unemployment claims in April from March out of the 16 counties, according to state unemployment data. Grundy County saw the smallest percentage increase – nearly 2% – in filed unemployment claims.

By comparison, there were 293,948 unemployment claims filed in March – amounting to a more than 1,150% increase in total filed unemployment claims in March from February – in northern Illinois, according to state data released in April. There were at least three-digit percentage increases in filed unemployment claims among the 16 counties.

DuPage County saw the largest percentage increase – 1,460% – in filed unemployment claims in March from February out of the 16 counties, per state data. Ogle County saw the smallest percentage increase – 297% – in filed unemployment claims.

Campbell had said unemployment numbers are still expected to be high until there’s an effective vaccine or treatment for COVID-19 on the market. Even if the state re-opened on May 30, he had said, there also may be people in high risk categories that would still be afraid to go to restaurants, bars or theaters.

Campbell said these types of numbers are unprecedented. For added context, he said, the Great Depression lasted for a dozen years and the unemployment rate also remained high due to the Great Recession around 2008 until about 2014 – though COVID-19 treatments and vaccines are anticipated to come much sooner than that.

“I think this should be a quicker rebound than the Great Depression or the Great Recession,” Campbell said.

With the Spanish Flu pandemic in 1918, Campbell said he has seen research about cities that practiced good social distancing ended up having better economic recoveries following the outbreak.

“So that just shows the importance of social distancing now that could lead to a better recovery later on,” Campbell said.

• This story has been updated to include additional comment and data from the Illinois Department of Employment Security officials and Clay Campbell, economics professor and department chair for NIU.

Source: The Daily Chronicle

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