Kansas jobless claims are shooting up to a level not seen since the COVID-19 pandemic started, reflecting new trouble for the state as it recovers from the economic damage caused by the virus.
State Labor Department data shows that Kansans filed 69,404 initial unemployment claims for the week ending Jan. 9.
It was the highest number of claims since the state received 55,428 in March, shortly after the pandemic hit the state.
Before the pandemic, the state would typically see between 1,500 and 3,000 new claims each week.
Wichita State economist Jeremy Hill said months ago that it was critical for Congress to pass a new stimulus package to stabilize core industries and keep cash flowing.
“Being as high as it is, it’s definitely a concern for the Kansas economy,” Hill said of the new surge in initial unemployment claims.
Hill said if a stimulus package had been approved earlier it might have helped shield the Kansas economy from more job losses.
“Timing was the most important thing,” he said. “Putting cash in back in November would have saved a lot of jobs in Kansas.”
“Economists on both sides – Republican and Democrat – knew that back in October.
“Everyone was arguing: Timing is important. It was just even more important for Kansas.”
He said stimulus money approved last fall would have kept money flowing in the economy and bolstered consumer confidence.
While the numbers look bleak now, Hill said he believes the state can gain back jobs lost in the retail and food service industries as consumer spending starts to return.
First-time unemployment claims in Kansas have been surging since the first week in November, when the state received 17,423 initial claims.
Since then, initial unemployment claims have increased in six of the last nine weeks before topping out at 69,404 on Jan. 9.
New claims data is expected to be released this week, with the state’s unemployment rate for December due out Friday.
The state’s unemployment rate climbed to 5.6% in November from 5% a month earlier.
It was the first increase in the state’s unemployment rate since April, when it hit a 40-year high of nearly 12%.
It may may increase again in December since the number of initial unemployment claims were up over November.
In December, the state averaged 34,532 initial claims a week, an increase from about 22,200 claims a week in November and about 19,900 in October.
The spike in Kansas initial claims comes as the country is seeing a similar trend.
New jobless claims reached 965,000 as of Jan. 9, an increase of 181,000 from the previous week’s revised level.
It was the largest increase since the beginning of the pandemic and the highest number of new unemployment claims since August.
In Kansas, the hotel and food service industry was hurt the worst with about 11,500 new claims, or 22.7% of all new claims for the week ending Jan. 9.
Health care and social assistance was next with about 5,000, or 9.8%, coming from those areas of the state’s economy. About 9.1%, or 4,600 new claims, came from manufacturing.
Continuing claims, which reflect Kansans receiving ongoing unemployment benefits, also is spiking.
There were about 104,000 continuing claims filed as of Jan. 9, up from about 93,000 a week earlier and more than double since mid-November.
University of Kansas economist Donna Ginther still wonders how much of the surge in unemployment claims might be attributed to ongoing problems with fraud – a question that the Labor Department has refused to answer.
Labor Department spokesman Jerry Grasso didn’t respond to an email asking about the mushrooming number of unemployment claims.
If the numbers are real, Ginther said, it spells trouble for the Kansas economy.
“This is concerning,” she said. “If these initial unemployment claims are not fraudulent, it suggests the Kansas economy is heading into another downturn.”
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