Vicious cycle: Florida jobless claims double as coronavirus rages. Shutdowns likely to blame
After weeks of steady declines, Florida saw a new surge in first-time filings for unemployment benefits as coronavirus cases hit record numbers throughout the state.
The U.S. Department of Labor reported Thursday 129,408 new unemployment filings in the Sunshine State for the week ended July 11 — an increase of 62,467 from the previous week and nearly double the previous week’s count.
Meanwhile, so-called continuing claims, representing the number of individuals who remain on the state’s unemployment rolls, jumped 307,982 to 889,934.
“The resurgence in coronavirus cases in the state is putting the economy at risk and we could see shelter-in-place restrictions being implemented again if this resurgence continues,” said Abbey Omodunbi, economist with The PNC Financial Services Group, in an email.
Companies announcing major layoffs in Florida in the week ended July 11 included concessionaire Delaware North and hotel brands Hilton, Rosen Hotels and Resort, Fontainebleau, and The Diplomat Resort.
Leisure and hospitality workers continue to bear the brunt of the economic downturn. In its Worker Adjustment and Retraining Notification to the state, Hilton, which operates The Diplomat Resort in Hollywood, summarized the massive impact the pandemic continues to exert on its business that led it to lay off nearly 1,000 employees.
“We did not and could not have foreseen how broadly and deeply the COVID-19 pandemic would spread and affect our business,” the company said. “Nor did we foresee that ‘lockdown’ orders, initially issued for short durations in certain specific cities, would spread throughout the country and be constantly extended and/or changed.”
Sean Snaith, director of the University of Central Florida’s Institute for Economic Forecasting, said Florida’s economy remains directly tied to limitations put in place by government officials to combat the pandemic.
The latest spike, he said, likely reflects the impact of Gov. Ron DeSantis’ order to effectively shut down bars throughout the state by banning on-premise alcohol consumption.
“Folks went back to work at bars, then the governor shut them down, so they got tossed back into the logjam [of applying for unemployment] that we’ve seen throughout the course of this whole episode,” Snaith said.
The state continues to suffer from delays in its unemployment filing system, so it is likely that the jumps seen Thursday represent more filers successfully getting through the state’s system.
The Florida Department of Economic Opportunity did not respond to request for comment.
Nationwide, 1.3 million new claims were filed last week, a decrease of 10,000 from the previous week. The national weekly figure has not dipped below 1 million since the coronavirus pandemic took off in mid-March.
“Initial jobless claims remain horrifically high,” said investment group BNP Paribas in a note to clients. “Although initial claims have declined for 15 straight weeks, the decrease of 10,000 is the smallest since claims started declining in early April, implying the labor market recovery is stalling.”
Florida’s surge comes at an especially precarious time: Just two weeks remain before the federal government’s $600 in additional unemployment assistance runs out. Earlier this week, Senate Majority Leader Mitch McConnell and Treasury Secretary Steven Mnuchin signaled a new aid package may be in sight.
Economists are nearly unanimous that more aid is needed.
“The risk of a dip lower in the economy has increased as more states adopt policies to combat the virus spread,” economists at Bank of America said in a research note. “Until the country manages to get the virus under control, the recovery is likely to be one of fits and starts.”
This story was originally published July 16, 2020 at 8:50 AM.
