SAN FRANCISCO - The U.S. Labor Department reported more than 1.5 million new unemployment claims nationally; a very small decrease from last month, but a decrease nonetheless. Thursday's numbers indicate that California's job bleed out continues and will be a long time recovering.
With some counties opening up, California's near quarter-million new weekly unemployment claims were down 5%, but still six times higher than they were in the months before the pandemic. Add to that, almost 70,000 more claims for federal pandemic relief, by those not covered by the state.
The state's total pandemic claims so far are well over 6 million claims. Former state Employment Development Department Director Michael Bernick is now in private law practice with the Duane Morris law firm.
"Despite these partial opening, jobs are not coming back and we're continuing to have layoffs," said Mr. Bernick.
Having already paid out more than $30 billion in claims, the cash-strapped state EDD unemployment fund, has already borrowed more than $2 billion from the feds in order to keep the state unemployment fund from going under. "In a lot of ways, we've become a type of unemployment insurance economy and it's really the EDD and that system that's keeping the economy afloat," said Bernick.
The state EDD forecasts that by the end of the year, it will owe Uncle Sam $7 billion. Though the EDD had a $3.2 billion surplus last year, it's deeper and deeper in debt to the Feds.
"In the past, the federal government hasn't forgiven this and there's no indication that it's going to. They've loaned the state's money, but, the states have had to always pay it back," said Bernick.
While the state's construction industry has has a good comeback so far, nationwide the future is the real question.
"Project halts and cancellations continue to be very significant. They've eased up somewhat, but, what we can't see from this historical data is what's coming down the pike," said economist Ken Simonson of the American General Contractors association.
With state and local government construction budgets on life support, privately funded projects are critical to the construction industry's rebound.
"Private owners have a lot of reason to put off construction or say, 'We can't afford it. We don't see the demand yet. We need more certainty about how well the economy is going to open up.'" said Mr. Simonson.
Though the most fully open states, Florida and Georgia have the biggest declines in unemployment claims, both states are having huge increases in coronavirus cases. Texas, also very open, is also spiking in cases but saw its unemployment claims increase.