The number of new unemployment claims around the country dropped below 1 million last week, reaching its lowest level of the coronavirus pandemic — but there’s a catch.
The U.S. Department of Labor this week changed its methodology for reporting new jobless claims, adjusting the way it accounts for regular seasonal swings in the workforce, such as holiday or agricultural employment, as the economy struggles to rebound from the coronavirus pandemic.
The result: New, seasonally adjusted unemployment claims dropped by more than 130,000 week over week, for a total of 881,000 for the week ending Aug. 29.
Had the Department of Labor not tweaked its methodology, it risked skewing jobless numbers during the country’s normal seasonal swings in October, November and December, said University of South Florida economics professor Chris Jones.
“It’s something that, in a normally functioning economy, you likely wouldn’t want to do,” Jones said. “The recent increases that we’ve had in unemployment aren’t looked at as normal, seasonal trends. They’ve come as a result of an aggregate demand shock — less demand in the economy, more social distancing, therefore fewer jobs.”
A more accurate week-to-week comparison may be unadjusted unemployment claims, which actually rose slightly from the previous week, to 833,352. But Jones said both the adjusted and unadjusted numbers are worth watching closely into October.
“Don’t take too much optimism out of the seasonally adjusted numbers, but don’t panic too much yet over the increase (in unadjusted claims),” he said. “If we see another one like that, then I think there’s the potential for larger concern going into the holiday season.”
In Florida, the number of unadjusted new claims last week dropped to 39,312, a decrease of more than 12,000. That number will likely be adjusted upward next week, but for now, it’s not just the lowest tally of the pandemic, but lower than the peak week of the 2009 recession. To date, the state has paid nearly $14.7 billion to 1.94 million claimants.
On Wednesday, the Bureau of Labor Statistics reported that just as Florida’s unemployment rose by a point to 11.5 percent in July, Tampa Bay’s unemployment rate rose from 9 percent to 10.1 percent, with more than 154,000 residents out of work. Thirteen metropolitan areas in Florida had more than 10 percent unemployment in July, up from just three in June.
Tampa’s Stellar Partners, which operates airport boutiques like Swarovski and Ron Jon Surf Shop, has notified the state that it will extend layoffs for 85 Florida employees, including 20 at its headquarters and 24 at Tampa International Airport.
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One reason shops and restaurants at Tampa International Airport may be struggling: Travelers who do decide to fly are spending less time there.
“When we were in a pre-COVID environment, you had passengers consistently arriving nearly an hour and a half, two hours before their flight, maybe taking the extra time to have a meal in one of our great restaurants,” Chris Minner, the airport’s executive vice president of communications, said during a Hillsborough County Aviation Authority board meeting on Thursday. “This year, that has really shortened up to an hour, an hour and 15 minutes.”
Because Florida’s economy relies so heavily on travel and tourism ― two industries particularly hard-hit during the pandemic ― it will be harder to climb out of that stagnation as the world gets closer to a vaccine, said Will Weatherford, former speaker of the Florida House and founder of investment firm Weatherford Capital in Tampa.
“I don’t see the unemployment shooting up, but I don’t see it shooting down in the near term, either,” he said. “You’ve got people who were getting larger unemployment checks that now are not. You’ve got companies that were receiving a reprieve from having to pay their mortgage or pay their note back to the bank who lent them money. A lot of those are wearing off.
“We can’t count on the Fed propping up our economy in perpetuity,” he added. “We can’t count on Congress meeting every six months and passing a $2 trillion spending budget to prop up our economy. At some point in time, the economy has to function on its own, properly. And we’re not there yet.”
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