Verizon strike inflates applications for unemployment compensation
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — The number of Americans seeking new jobless benefits rose for the second week in a row as thousands of phone workers at Verizon Communications filed claims, government data showed.
New applications for U.S. unemployment compensation rose 5,000 to 417,000 , the Labor Department said Thursday. Initial claims from two weeks ago were revised up to 412,000 from an original reading of 408,000.’
Economists surveyed by MarketWatch had expected new requests for jobless benefits to total 410,000 on a seasonally adjusted basis.
Although the number of claims was boosted by the Verizon strike, applications for jobless benefits still remain at an elevated level normally associated with mediocre hiring trends. In a strong economy, claims usually fall far below 400,000 as companies rapidly add workers.
The average of new claims over the past four weeks, meanwhile, increased by 4,000 to 407,500. The monthly average is seen as a more accurate gauge of labor trends because it smooths out volatility in the week-to-week data.
In addition, the Labor Department said the number of Americans who continue to receive state unemployment checks fell by 80,000 to 3.64 million in the week ended Aug 13. Continuing claims are reported with a one-week lag.
Verizon strike
At least 8,500 workers at Verizon Communications VZ
-0.71% filed claims last week and
at least 12,500 filed claims the week before, the government said. These workers could try to claim that the company locked them out.
In a typical strike, workers are not eligible for unemployment benefits if they walk off the job. Yet they can receive compensation if the company prevents them from going to work as part of a contract dispute. If there is a disagreement over whether a labor standoff is a strike or lockup, the government steps in to arbitrate.
By law, states have to accept claims applications, but they do not have to pay out benefits if they decide that the workers went on strike.
In any case, jobless claims continued to hover above the 400,000 level as they have done for most of the year, reflecting little improvement in a weak U.S. labor market. The unemployment rate is stuck around 9%, or an even higher 16% when including people who are forced to work part-time or have stopped looking for a job.
The slow rate of hiring explains why the federal government is still paying extra benefits to millions of Americans. Some 3.64 million people received extended federal benefits in the week ended Aug. 6, down about 20,000 from the prior week. These people have already used up state benefits, which usually last six months.
A total of 7.29 million people received some kind of state or federal benefit in the week of Aug, down 45,989 from the prior week. Total claims are reported with a two-week lag.
Jeffry Bartash is a reporter for MarketWatch in Washington.
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