Layoffs continue at high rate

San José, CA – During the week ending February 6, almost 800,000 (793,000) people filed for new claims for regular state unemployment insurance. More than 330,000 others applied for the federal Pandemic Unemployment Assistance or PUA that covers the self-employed and gig workers. This comes to a total of more than 1.1 million people who have lost their jobs in the past week.

Beginning the week ending March 21, 2020, more than a million Americans each and every week have had to file for unemployment insurance benefits. As of the latest data for the week ending January 23, there were still more than 20 million people collecting benefits under either state or federal programs. More and more have been out of work for more than six months. This can be seen in the rising number of people collecting benefits under the federal Emergency Unemployment Compensation or PEUC. This number rose by more than a million people to a total of almost 4.8 million in the same week ending January 23.

The latest jobs report from the Department of Labor, based on a survey done during the week ending January 16, showed that job losses are spreading across the economy. In December the job losses were almost entirely from hotels, restaurants, and other travel and leisure related employment, while most industries made smaller gains. While the pandemic began to ease in January, the job losses actually spread so that more industries were losing jobs than gaining.

The federal government began accepting tax returns for 2020 on Friday, February 12. Many of the 60 million people who had to rely on unemployment benefits will be reminded that these payments are taxable income. In contrast, Paycheck Protection Program loans to businesses that were forgiven by the government (and therefore are a grant) are not taxable. In addition, these businesses can use the expenses that qualified them for loan forgiveness as deductions from their other revenue.