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U.S. state unemployment payments in April jump five-fold from February

Kitco News

WASHINGTON (Reuters) - Unemployment payments jumped to at least $16.2 billion in April, up more than five-fold from February, as layoffs attributed to the coronavirus pandemic swept through the economy.

The figure is still preliminary, with April payment data for six states including Florida and Michigan still not available on a Department of Labor Web site that provides detailed unemployment insurance information from the 50 states and the District of Columbia.

But the filings available so far show the scale of the payments moving through the economy and the magnitude of the hit to state unemployment trust funds that must be resolved.

The U.S. Labor Department reported on Thursday another 2.4 million people filed for unemployment benefits for the first time last week, bringing total filings since mid-March to nearly 39 million.

States reporting so far paid a total of 49 million weeks of unemployment insurance in April, up from 7.2 million in February — the equivalent of approximately 11.4 million people collecting benefits for the month.

California and New York between them paid around $4.5 billion, compared to around $654 million as of April, 2019, and around $660 million in February of this year.

Claims for unemployment insurance began a historic rise in mid-March and have topped 38.6 million since then. But state unemployment systems were overwhelmed by the load and backlogs developed. Total payments in March were around $3.8 billion compared to $2.7 billion in February.

Payments began flow in April, boosted by an extra $600 per week and extended to solo entrepreneurs and contractors by the CARES Act.

It was not immediately clear whether the April payments reported by states included those extra federally mandated benefits.

Economists have estimated that the jump in government transfer payments may offset much of the income lost due to coronavirus-related layoffs and business closures, at least for the time being. Some of the additional payments are due to expire this summer.

Reporting by Howard Schneider; Editing by David Gregorio

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