New York Jobless Claims Surge Amid Broader Labor Market Strength

NY unemployment figures expand as coronavirus measures bite
March 18, 2020 Updated: March 18, 2020

While the U.S. labor market remains strong overall and again exceeded expectations in February, New York reported a sharp surge in the number of citizens seeking unemployment insurance this week as shops, restaurants, and retail outlets closed in efforts to contain the CCP virus.

The Epoch Times refers to the novel coronavirus, which causes the disease COVID-19, as the CCP virus because the Chinese Communist Party’s coverup and mismanagement allowed the virus to spread throughout China and create a global pandemic.

The New York State Department of Labor reported that its servers had experienced “a massive increase in the volume of Unemployment Insurance claims,” causing the system to crash. In a statement to The New York Times, spokesperson Deanna Cohen said that the agency had received 8,758 calls by noon on Monday, more than three times what it had received the previous Monday.

“We are seeing a spike in volume that is comparable to post 9/11 but make no mistake, anyone entitled to these benefits is going to receive them in a timely manner,” said Cohen, according to the statement.

While much of the increase in jobless claims may have been due to businesses scaling back or shutting down operations, the figures may also have been influenced by New York Governor Andrew Cuomo’s move on Saturday to waive the normal seven-day waiting period for unemployment insurance for people out of work due to the virus pandemic. This measure meant that applicants from an entire week all became eligible to apply on Saturday, with phone lines understandably busy when they opened on Monday morning.

It is also possible that many New Yorkers who wished to apply for unemployment insurance were simply heeding Cuomo’s “Stay Home, Stop the Spread” message by applying online and via telephone instead of in person at their local career center. This option also vanished on Monday, however, as the New York Department of Labor announced that all in-person appointments Career Centers across New York State had been canceled until further notice.

Employment Figures Remain Strong

Businesses continued hiring apace in February, with nonfarm payroll employment increasing by 273,000 to put the economy in a strong position as the CCP virus broke out. According to the Bureau of Labor Statistics, wages continued to grow in February while the unemployment rate declined to a 50-year low of just over 3.5 percent, with female unemployment reaching a 66-year low of 3.4 percent.

According to the Bureau, “Notable job gains occurred in health care and social assistance, food services and drinking places, government, construction, professional and technical services, and financial activities.”

According to a press release from the New York Department of Labor, private sector job numbers in New York State grew by 30,500 or 0.4 percent in January, a new monthly record. The statewide unemployment rate also decreased from 3.9 percent to 3.8 percent in January, which was also a new record monthly low.

Increases in nonfarm payrolls of 273,000 jobs across the United States last month may also have been due to unseasonably mild weather in February, which was a boon to weather-sensitive industries. Construction added 42,000 jobs last month on top of the 49,000 added in January. However, February payrolls in the transportation and warehousing sectors declined by 4,000 jobs in February.

According to the White House: “Considering the historically low unemployment rate, accelerating job growth at this point in the recovery shows the U.S. economy is strong and resilient against shocks. It is much more difficult to create jobs later in an economic expansion, as continued job growth at this elevated level requires bringing workers off the labor market’s sidelines.”

U.S. Secretary of Labor Eugene Scalia said in a statement: “In the context of the already robust economy described in the president’s State of the Union address, the job growth from January to February marks the strongest two-month start to the year of this administration. The unemployment rate dropped last month to 3.5 percent, the lowest level in 50 years, and has remained at or below 4 percent for two years. The unemployment rate for women also fell, matching the lowest rate since 1953.”

“The blue collar boom continued in February,” Scalia added, “with private sector wages growing 3 percent year-over-year, and production and non-supervisory workers’ wages increased even faster than managers’. February marks the 19th consecutive month that wages grew at or above 3 percent.”

However, the most recent reports do not yet capture the effect of the CCP virus, which began to spread in the United States in late February.

“Sadly, these job numbers are sure to be eclipsed by response to the spread of the coronavirus,” economist Michael Hicks from Ball State University told The New York Times. “The supply shocks from quarantined factories in Asia are weeks away from idling U.S. factories, and the demand-side impact on tourism, travel, eating and drinking establishments is already being felt across the world.” Hicks said he believes the March jobs report will be far less optimistic.

Federal Reserve Chairman Jerome Powell said in a statement (pdf) on March 15 that the measures essential for containing the coronavirus outbreak “will nonetheless understandably take a toll on economic activity in the near term.”

The Fed cut interest rates to near zero before financial markets opened this week in an effort to stave off the worst of the virus’s effect on the economy.

Lead economist at Oxford Economics’s New York office, Nancy Vanden Houten, told Reuters that she believes “it’s just a matter of time before the fallout from the coronavirus starts to show up in increased layoff activity.”

Measures to Alleviate Unemployment

The U.S. Department of Labor moved on Thursday to grant states the flexibility to amend their laws as necessary to provide unemployment assistance to limit the effects of the virus. States can pay unemployment benefits in the case of virus-related temporary unemployment, as well as to those placed in quarantine and those who are forced to leave their employment because of the risk of infection or to care for family members.

“The administration is using all available tools to decrease the risk of coronavirus in the United States and to assist workers who may be affected,” said Scalia in a statement. “Under the guidance issued today, states have greater assurance about the circumstances in which they are authorized to extend unemployment insurance benefits to Americans whose employment has been disrupted by coronavirus.”

Retail, Restaurants Hit Hard

According to Bloomberg, foot traffic to retail outlets has declined by almost a third last week, as measured by location-data specialists Prodco Analytics.

Retailers are now likely to see further reductions across the United States, and many major outlets including Nike, Ralph Lauren, Apple, and Abercrombie & Fitch have decided to temporarily close their U.S. stores until the end of March.

Purchases have also tended toward essential items including groceries, sanitary products, and sanitizing materials and away from clothes, leaving apparel outlets in particular feeling the pinch.

However, positive employment news was also to be found this week, with Amazon announcing 100,000 new jobs to fulfill increased order books, with more consumers electing to purchase online in recent weeks.

Amazon also announced wage increases for order fulfillment and delivery staff, saying in a statement: “We are opening 100,000 new full and part-time positions across the U.S. in our fulfillment centers and delivery network to meet the surge in demand from people relying on Amazon’s service during this stressful time, particularly those most vulnerable to being out in public.

“We also know many people have been economically impacted as jobs in areas like hospitality, restaurants, and travel are lost or furloughed as part of this crisis. We want those people to know we welcome them on our teams until things return to normal and their past employer is able to bring them back.”

New York State Department of Labor also tweeted that it was seeking “to immediately hire 59 hourly Senior Employment Security Clerks in our Albany and Endicott offices to help process Unemployment Insurance claims.”

Tom Ozimek contributed to this article.