Gov. Chris Christie signed a bill last week revising state law to allow the long-term jobless to collect federal unemployment funds for an extended amount of time — action that comes as the number of new unemployment insurance claims has fallen to pre-recession levels, but the number of ongoing claims remains consistent.
“The prospects for employment for those who are unemployed — and particularly those who have been unemployed for long periods of time — are still quite limited,” said J.H. Cohn LLP economist Patrick O’Keefe, who called job creation in New Jersey “erratic.”
“Without the extensions of benefits in the entire spectrum — the national program and the state program — their incomes are extraordinarily limited. At a minimum, that kind of income supplement is necessary.”
In the U.S. Department of Labor’s weekly unemployment report, for the period ending April 9, the number of people facing expiring benefits in New Jersey increased from February to March.
According to the state, the measure revises the eligibility formula for extended benefits by using three preceding years of data, as opposed to the current formula, which looked only at the two preceding calendar years of information. By revising the state’s eligibility formula for extended employment insurance benefits, New Jersey will no longer risk ineligibility because of the recent decline in the unemployment rate.
“We’re happy to continue a safety net, in cooperation with the federal government, for more than 60,000 unemployed people in New Jersey as our economy slowly improves and our small, but steady job growth continues,” Christie said in a statement. “This legislation provides relief for the long-term unemployed, and at the same time will positively impact our economy by extending the purchasing power of unemployed New Jerseyans.”
The Department of Labor’s report also showed that continuing unemployment claims continue to improve gradually.
“I think what we take from that is, while employment levels have stabilized in New Jersey, hiring has not yet become sufficiently robust to make significant inroads into the ranks of the long-term unemployed,” O’Keefe said.
While hiring grows slowly in the state, other unemployment indicators are “improving remarkably,” according to O’Keefe. In terms of layoffs, “We’re actually, for four weeks in a row now, below the average for the five years prior to the downturn. That’s encouraging — that means the labor market is behaving as if it’s in a mild to sustained expansionary mode,” he said.
Still, “both the depth and duration of the downturn as well as — especially here in New Jersey — the very tepid pace of recovery have inclined all of us toward caution. Objectively, when we look at the indicators of economic activity generally, the caution is warranted, but it is caution with a positive bias,” O’Keefe said.
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