Leading economic indicators often signal that a downturn is approaching ahead of other cyclical changes. February monthly unemployment figures stood at a low 3.5% but it is a lagging indicator. It’s a backward glance at the past.
Initial unemployment claims now tell a different story, a more realistic one given our recent economic shutdown. The average weekly initial claims for unemployment insurance, a leading or predictive indicator, changed dramatically in one week.
Why Unemployment Matters
Our working lives have been disrupted by the virus. As a result, significant consequential economic effects weigh on households and businesses.
Some economists suggested that we may experience extreme unemployment levels due to the virus. Hopefully, we can avoid that dire scenario. Ongoing Fed action will pump liquidity helping those who need credit.
Some of us are fortunate to be able to work remotely from home. Others are heavily engaged in the healthcare service/equipment sector and are on the front lines of this disease. We have many heroes among us who have become casualties. We need to honor their hard work and sacrifices.
Eligibility For Unemployment Benefits
You are eligible for benefits if you are unemployed through no fault of your own. Typically, you cannot file if you were fired or let go for “gross misconduct.” Please note that you should apply in any case because gross misconduct may only be proven in most cases through a lawsuit. Also, rules may be relaxed during this time due to the coronavirus.
More Money Will Likely Be Coming For The Unemployed
When filing for benefits, you must be available to work and actively looking for work. This means you may have to check in with your local office in person or via Skype to provide updates on your job search. You cannot collect unemployment benefits if you have another job or if you are enrolled in school or for training.
Retaining Key Company Benefits
Those that are temporarily laid off or furloughed are able to collect unemployment benefits. However, they will collect if they are unpaid during the time they are not working. Typically they will also continue to keep some of their benefits coverage, notably medical/dental and other insurance.
Government Action As A Result Of COVID-19
Recent passage of the Families First Coronavirus Response Act was designed to provide some mandatory relief for small business owners and their employees. The rationale for this law is to encourage those impacted by the virus to quarantine themselves.
Losing your job through no fault of your own can come about through layoffs, downsizing (sometimes called rightsizing) or reduction in force. Temporary layoffs are more like furloughs which infers you will have a job to go back to after a time period.
Furloughs Have Become More Common
Generally, furloughs are mandatory time off from work without pay. Furloughs are not layoffs as employees retain their jobs, benefits and any employee rights they are entitled to. Temporary layoffs are furloughs so long as employees are expected to return to work at the end of the period.
Personal Capital encourages you to meet with a financial advisor to get a review of your investment portfolio for free. This free perk gives you a chance to get a professional view of your assets and possible recommendations. Choosing a financial advisor is a significant decision, and don’t be afraid to ask questions of your prospective advisor.
Unemployment levels are central to the health of our economy. We are just seeing the substantial ramp up in initial claims for unemployment insurance to unprecedented levels. That will hurt us and may be the difference between a mild, short recession or something far worse.