A review of the report of initial applications for unemployment released March 30th indicates that the recovery from the Pandemic recession may be ending. For the first time since the pandemic recession the number of initial applications for unemployment compensation exceeded the same week in the prior year. The number of applications reported for the week of March 18th increased from the same week in 2022 by 30,426 and for the week of March 11th increased by 150,557. Thirty-five states reported increases for both weeks, suggesting that there may be a broad economic trend resulting in increases in UI applications year over year. See News Release (dol.gov)
This may be an indication of recovery from the recession, but also suggests that additional increases in UI applications may be coming. Increases in interest rates, continuing inflationary pressures, and recent lay-off announcements from large employers may result in further Increases in claims and benefit payments. Benefit payment increases for weeks prior to June 30th will increase experience rates on average for contributing employers for 2024. If the trend continues there would also be an impact on the solvency of state unemployment insurance funds.
Employers and states should factor in these trends in projections of potential economic downturns at the end of 2023 and into 2024.
UWC is following these trends closely.
Doug
