UPDATE: Unemployment claims rise to 19,000

A 4000 percent increase since March 14
April 2, 2020

COVID-19 is taking a toll on Delaware's weekly initial unemployment claims, which soared more than 4000 percent from the second to the fourth week of March.

Nearly 19,000 Delawareans filed for unemployment for the week ending March 27, the latest available data. There were 10,720 new claims filed for the week ending March 21, an astronomic jump from 473 filed a week earlier.

“It's not stopping. It's very, very bad. It's nothing like we've seen before,” said Jim Butkiewicz, professor of economics at University of Delaware.

Butkiewicz said he expects unemployment to continue to rise.

“I think the job losses have continued,” he said. “This last week [in March] there were continued job losses, continued layoffs and on into this week and so forth.”

For the week ending March 21, Butkiewicz estimated Delaware's unemployment rate was 6.2 percent, up 2.2  percent from the 4 percent rate reported earlier in 2020. Using the latest numbers, the rate is sure to tick up more.

“It's not going to get better right away. Not until things calm down, and we're able to let people go back to work,” he said.

Thomas Dougherty, chief labor market economist for the Delaware Department of Labor, said the state produces unemployment data once a month, and March data will be released April 17. He said initial claims are not used to calculate unemployment. According to the U.S. Department of Labor, initial claims measure emerging unemployment. The number of persons claiming unemployment is measured over continued weeks.

“Initial claims are new claims, but we use continued claims as an input to calculate the unemployment rate,” Dougherty said. “In addition, the number of people who receive continued claims [benefits] is only a small fraction of the total number of unemployed.”

The total number of Delawareans unemployed in February – the latest data available – was 19,228; the unemployment rate was 3.9 percent. Over the past five years, Delaware's unemployment rate had been steadily dropping about half a percent a year from 5 percent in 2015 to a low of 3.5 percent in February 2019. Unemployment rates ticked up a bit to 4 percent through 2019 and early 2020, before falling to 3.9 in February 2020.

Although rates had fallen over the past year, the overall number of unemployed increased by 2,000 from February 2019 to February 2020, but those increases were offset by more Delawareans employed.

Butkiewicz said the true effect of the COVID-19 economic shutdown won't be known until the April report is available. “We may not really see the increase of unemployment until we get the April number,” Butkiewicz said.

Looking on the bright side, however, Butkiewicz said, the downturn should not be long-lasting.

“Although this has severe economic consequences, this is not an economic event. It's not like a normal recession where something happened to slow the economy down. This is a medical emergency, and we've had to shut the economy down because of that to keep people alive.”

Local legislators say they are keeping on eye on the federal stimulus to make sure money goes to people who need it most in the beach communities.

“The unemployment stats are going to be scary, but you have to remember we had low unemployment for a long time. We had a great economy, and people were working,” said Rep. Steve Smyk, R-Milton.

Delaware is slated to receive $1.25 billion from the federal stimulus bill signed March 27, and the state should receive more federal unemployment funding, Smyk said. “We're still waiting to see what happens with the federal bill, then we can start counting the beans,” he said.

Sen. Ernie Lopez, R-Lewes, said he and his staff have been studying the 861-page federal stimulus bill so they know how to best help people hard hit in the Cape Region. He said he wants to make sure constituents are not caught up in red tape as they apply for assistance.

“We have a serious critical need to ensure fast access to cash,” Lopez said. “ We've got to get it quickly into the hands of those who need it. If we're not able to do that, than this problem is going to continue to grow exponentially going forward, and none of us wants to see that happen.”



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