23.6 C
New York
Wednesday, May 22, 2024

Unemployment claims for self-employed and gig workers fell by 50%. Here’s why that’s misleading

  • Initial claims for Pandemic Unemployment Assistance, or PUA, fell sharply last week.
  • Half the number of self-employed and gig workers applied for unemployment benefits, according to the Labor Department, suggesting an improved labor market.
  • However, that drop isn't real — it only occurred on paper, according to economists.

Uber driver picking up customer.Al Seib | Los Angeles Times | Getty Images

Self-employed and gig workers applied for unemployment benefits last week at half the level from the week prior, according to Labor Department data reported Thursday.

That suggests a strong rebound, breaking from persistently high — even increasing — levels in recent weeks.

But that rebound likely didn't happen. It only occurred on paper, experts say.

More from Personal Finance:
Congress approves $25 billion in rental assistance. Here's how to apply
$15 minimum wage edges closer as Democrats flip Senate
What happens with Social Security when someone dies

Initial claims for Pandemic Unemployment Assistance — a temporary federal program paying benefits to gig and other workers ineligible for state aid — fell to about 161,000 last week. The week prior, around 310,000 workers applied for PUA benefits.

Economists and unemployment experts offered a few explanations as to why the drop occurred.

The sharp decline likely relates to the timing of a recent $900 billion Covid relief package, administrative blips among states and worker behavior, they said.

It also comes against a backdrop of stubbornly high claims for benefits in other unemployment programs. Overall, more than 1 million Americans applied for aid last week.

"The 50% drop in initial claims is nothing to take at face value," Elizabeth Pancotti, a policy advisor at Employ America, a progressive group, said on Twitter.  

Related Articles

Latest Articles