Another 870,000 unemployment claims as fraud and backlogs cloud data

Andrew Cummings
September 26, 2020

Many American workers applying for unemployment benefits after being thrown out of a job by the coronavirus face a new complication: States' efforts to prevent fraud have delayed or disrupted their payments.

According to U.S. Department of Labor data released today, the seasonally adjusted unemployment rate was 8.6 percent for the week ending September 12, with 12.58 million workers filing continued claims for benefits.

New US jobless claims reach 870,000 last week as layoffs remain elevated 6 months after the coronavirus pandemic struck the economy. In Mahoning County, the 347 new claims is 28 more than the week before, giving the county 35,943 since the middle of March. Yet it also indicates that others have exhausted their regular jobless aid, which last six months in most states.

Thursday's data comes as USA politicians struggle to move forward with a new fiscal stimulus package, something economists and the Federal Reserve argue is needed for the recovery from the COVID-led downturn to continue.

Though roughly 14 million people are classified as receiving aid under that program, economists increasingly regard that figure as unreliable and likely inflated by both fraudulent applications and inaccurate counts.

These people include gig workers and contractors who have more difficulty verifying their income than do traditional employees whose tax forms are on file with the state. As of August, the government said the unemployment rate in the USA was 8.4%. Because the program is retroactive to the week that ended August 1, it lasted through the first week of September in most states.

The Labor Department said Thursday that the number of people who are continuing to receive unemployment benefits declined to 12.6 million. The 20 people who were charged Wednesday had sought a combined $300,000 in money from the Pandemic Unemployment Assistance program, state Attorney General Josh Shapiro said.

While ODJFS continues to manage the state's unemployment program, it also has multiple initiatives underway to help spur Ohio's economic recovery.

"Only faster progress against the virus itself will assuage the unemployment struggles of so many workers in fields like entertainment who can't return to their jobs until social distancing restrictions are relaxed", said Andrew Stettner, senior fellow at The Century Foundation in NY. Gross domestic product is expected to rebound at as much as a record 35% annualized rate in the third quarter after tumbling at a 31.7% rate in the April-June period, the worst performance since the government started keeping records in 1947.

Other reports by iNewsToday