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80% New Unemployment Claims Boggles New York



80% New Unemployment Claims Boggles New York

The number of unemployment claims in the U.S. leaped to a one-year high in the first week of May. 

While this might seem to indicate a greater unemployment problem or a downturn in the economy, economists are not terribly worried. 

The reason lies in the geographical concentration of the majority of those claims and the unique forces which acted upon it in the first week of May.


It Was New York State That Was Responsible For An Astounding 80% Of The Unemployment Claims That Were Filed Recently

It is true that overall unemployment claims for the week jumped from 20,000 to 294,000, according to a Labor Department Report.  However, the four-weeks claim average was only 10,250.

The numbers are definitely intimidating.  However, a number of factors unique to New York most likely contributed to the huge influx of unemployment claims originating from that state. 

Economists do not seem to feel that this week’s numbers are indicative of a larger trend of higher unemployment across the United States.

Quite simply, New York probably suffered from a mere confluence of adverse circumstances, leading to its spike in jobless claims.

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First, There May Have Been So-Called “Payback” From The Pleasantly Mild Winter That New York Experienced This Year

Payback from mild-weathered winters happens when certain employers—such as those in construction—that rely on more temperate weather to do their jobs hire employees earlier in the year than they ordinarily would. 

Then, when the months come when they would usually be looking for new faces, they feel that they already have enough personnel, and they don’t hire any more workers.

This can lead to lower-than-predicted hiring rates later on in the year when they would be expected to be hiring.  It can also give the impression of an economic downturn, where in fact the expected hiring simply happened sooner than predicted.

New York experienced a very mild winter this year, which while good for its maple industry, may be leaving qualified workers in other industries out in the cold this May.  Furthermore, this “payback” is only one factor that may have contributed to the skyrocketing unemployment claims.

A Brief List Of Weather-sensitive Industries:

  • Utility companies
  • Breweries
  • Fashion houses
  • Building companies/construction
  • Sports goods manufacturing

Hiring practices at any or all of these may have contributed to the apparent downturn in New York’s employment numbers.


Additionally, Spring Break Came Late This Year In New York

Every Spring Break, the non-teaching staff of schools—custodians, bus drivers, and cafeteria workers—file for unemployment, as they are entitled to do under the law. 

The last six years of data show spikes in unemployment claims lining up with the Spring Breaks of that particular year.  Regardless of how the practice is viewed, these numbers show that it happens regularly.

They also indicate that a not-insignificant number of non-educational workers take advantage of this practice every year. 

This year, Spring Break happened in May in New York, lining up perfectly with mid-winter payback and another major employment event which took a serious toll on New York’s unemployment claim numbers.


39,000 Workers Who Went On Strike At Verizon Back In April Became Eligible To Receive Unemployment Insurance In May

A very contentious strike is taking place between Verizon and 39,000 of its workers and has been for a month now.  Verizon wants to outsource customer service calls, and the union claims that this is in direct violation of agreements to keep it local. 

In fact, about 13,000 of the striking workers are call-center employees with concerns about job security.

Because Verizon hired temporary replacements, the striking workers are now eligible to apply for unemployment benefits. 

Furthermore, not only are they eligible, but they were also encouraged to apply by their union.  There is no sign that the strike will end soon as the company is claiming vandalism, and the union believes that the replacement workers hired by Verizon cannot do their jobs to anyone’s satisfaction.

All in all, another 39,000 claims do New York’s unemployment figures no favors.


So, Apart From Being Very Unlucky In The First Week Of May, How Is Unemployment Doing?

Economists say that even counting this week, we have made it for 62 consecutive weeks without breaking 300,000 jobless claims.

 This indicates that the job market is improving.  The jobless claims have now been below 300,000 for the longest number of weeks since 1973.

April’s unemployment rates were excellent.  The four-week moving average of claims three weeks ago was at 256,000.  This is the best number we’ve had since December of 1973.

Overall, the job market is in a reasonably good place.  This week, New York simply had the misfortune to be the exception that proves the rule.

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