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NC economy struggling as PUA checks come to an end

July 23. Pandemic Unemployment Assistance (PUA) checks are coming to an end July 25.

The extra $600 per week combined with unemployment insurance has boosted the combined benefit above the previous wage for at least half of those receiving the benefit, says Mark Kurt, an associate professor of economics at Elon University in Elon, NC.

10th worst recovery

Meanwhile, North Carolina is experiencing the 10th worst recovery measured by unemployment claims, with a 690.73 percent change in new jobless claims during the week of July 6 compared to the same week last year. There were 26,861 new claims the week of July 6, 2020 vs 3,397 the week of July 8, 2019, in North Carolina.

MARK KURT

A nationwide review of unemployment claims by WalletHub shows North Carolina suffered a 665.71 percent increase in unemployment claims so far this year vs. last year.

Since the COVID-19 economic crisis began in mid-March, unemployment claims have risen to 1,200,114 during the week of July 8 compared to just 52,290 between the week of March 18, 2019 and the week of July 8, 2019, WalletHub says.

North Carolina’s unemployment claims are experiencing the 10th slowest recovery in the US, according to WalletHub. To view the study, and compare North Carolina to the rest of the country, click here.

PUA supplements each unemployed worker with an additional $600 weekly per worker from March 29 until July 25, regardless of previous income from labor.

The high benefits from PUA and unemployment have “incentivized people not only to forgo searching for new employment but also to defer being recalled” by their former employer.

“There is some concern that temporary separations may become permanent creating higher future unemployment than we would have otherwise,” Kurt said.

What recovery looks like

He anticipates a U-shape recovery.

Many firms across the country and world have temporarily ceased operations. American employers are receiving loans via the CARES Act and access to credit through actions by the Federal Reserve to ensure liquidity.

“However, only a portion of those loans are forgivable, the rest will have to be paid back by firms,” Kurt said.

There are still 17.8 million Americans unemployed due to the COVID-19 pandemic in total. WalletHub said there were 1.4 million new unemployment claims nationwide last week, compared to 6.9 million during the peak of the pandemic—a 79 percent reduction.

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