The dwindling number of first-time jobless claims has coincided with the widespread administering of vaccines, which has led businesses to reopen or expand their hours and drawn consumers back to shops, restaurants, airports and entertainment venues.
The payments will continue because the state must give recipients a 30-day notice that they will stop, which extends past the scheduled Sept. 6 end of the federal pandemic unemployment programs, the Indiana Department of Workforce Development said.
A decision issued Tuesday by the Indiana Court of Appeals is allowing the state to again stop the federal enhanced unemployment benefits that Gov. Eric Holcomb had tried to end in June because he thought the extra money encouraged workers to stay out of the job market.
Indiana has more than 17,000 pending appeals of unemployment-claim denials. Only California, Texas and Virginia—states with much larger populations—have more.
The unemployment rate dropped to 5.4% in another sign that the U.S. economy continues to bounce back with surprising vigor from last year’s coronavirus shutdown.
Unemployment claims remain high by historic levels: Before the pandemic slammed the United States in March 2020, they were coming in at around 220,000 a week.
Economists characterized last week’s increase as most likely a blip caused by some one-time factors and partly a result of the inevitable bumpiness in the week-to-week data.
State officials argued in their court filings Monday that a Marion County judge “abused” his discretion last month by ordering Indiana to resume participation in the benefit programs.
The Indiana Department of Workforce Development said those who have remained unemployed since federal payments were cut off last month will begin receiving back payments.
Indiana’s unemployment rate has been hovering at or near 4% for the last sixth months. It was 3.3% in March 2020, just before the pandemic triggered wide-scale layoffs and job losses.
The Indiana Court of Appeals ruled Monday that the state temporarily continue payment of federal unemployment benefits, affirming an earlier court order that Indiana must restart the extra $300 weekly payments to unemployed workers.
Attorneys for the state maintain Indiana can’t continue paying out the benefits because the state has already ended its agreement with the federal government to administer the federal programs.
The news is likely to be seen as a good sign for the economy more than one year into the pandemic, after numerous wrinkles have emerged to complicate a labor recovery many hoped would be faster at this level of vaccinations.
There are signs that people are re-evaluating their work and personal lives and aren’t necessarily interested in returning to their old jobs, particularly those that offer modest wages.
Last week’s drop in jobless claims nationally was steeper than economists had expected. Applications for unemployment benefits have now fallen in 10 of the past 12 weeks.
The state Department of Workforce Development said it was determining how to resume the federal programs if the judge’s order remains in place.
Gov. Eric Holcomb and the state’s Workforce Development office “will discuss an immediate appeal of the judge’s order with the Attorney General,” the governor’s office said.
While those supplemental benefits might have contributed to a reluctance to return to work for some, the unemployment rate in Indiana has declined dramatically since the height of the pandemic.
The latest numbers show Hoosiers filed 4,641 initial unemployment claims during the week ended June 12, a drop of 465 from the previous week.
A lawsuit filed on behalf of five Indiana residents and Concerned Clergy of Indianapolis challenges Gov. Eric Holcomb’s decision to end extended unemployment benefits provided through the federal CARES Act.
