In yet another sign that Washington has not hit bottom in the pandemic recession, new claims for unemployment insurance are surging again.

For the week ending July 11, workers in Washington filed 40,466 new, or “initial,” claims for unemployment insurance — a 42.5% jump from the prior week — reported the state Employment Security Department (ESD) Thursday.

While that’s less than a quarter of the weekly claims the state was seeing at the peak of pandemic-related layoffs in late March, it’s a marked change after six weeks when jobless claims either fell or rose only modestly.

Washington’s surge shows that “we did not see the V-shaped recovery that many were theorizing,” said Anneliese Vance-Sherman, ESD’s regional labor economist for the Seattle area, in an email.

Nationally, initial weekly claims fell roughly 0.8%, to 1.3 million, the U.S. Labor Department reported Thursday.

As government restrictions and consumer anxieties continue to limit economic activity, Vance-Sherman said, “many businesses and workers that thought they could wait out the storm are facing a harsh reality.”

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Among the sectors feeling that reality most sharply: accommodation and food services, which in Washington saw a 47% increase from the previous week, to 4,534 initial claims; retail, up 36% to 3,023 ; and manufacturing, up 13% to 2,952.

Economist James McCafferty, a director at the Center for Economic and Business Research at Western Washington University, thinks the surge in new claims also reflects the fact that the seasonal hiring that normally would be under way in some sectors hasn’t happened this year.

Another factor behind the surge, McCafferty speculates, is rising business anxieties over recent COVID-19 trends, including “the rising case counts, recent news on schools and public policy locally and nationally becom[ing] more restrictive again.”

As another sign of a sputtering recovery, Vance-Sherman says, is that not all of the initial claims are new, but instead represent prior or older claims by out-of-work individuals who “returned to jobs that tentatively revived, only to return to the unemployment-insurance system again.” That pattern shows how, in this fragile recovery, “many workers are marginally attached to the labor market, and are in a precarious situation.”

That precarious state comes as Washingtonians contemplate the end of the $600 weekly federal pandemic assistance payment, which will expire after the week ending July 25 unless Congress extends it.

Many economists say the payments, which have supplemented state unemployment programs since March, have blunted the worst of effects of one of the sharpest economic downturns in U.S. history. 

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Since March, federal pandemic unemployment assistance has put nearly $4.5 billion into the Washington state economy, according to report by The Century Foundation, a New York-based think tank.

Losing that assistance would cost the state nearly $334 million a week, the foundation said. The result would be to “pull the rug out from under families struggling to endure this once-in-a-lifetime economic catastrophe and would threaten the national economy’s potential recovery,” says Andrew Stettner, a senior fellow at The Century Foundation.

The ESD put out Thursday’s jobless numbers in a news release, rather than holding a news conference, which the agency is now doing only every other week.

But one labor advocacy group used the report as an occasion to criticize the ESD for being slow to pay benefits to tens of thousands of workers in Washington, whose claims have been held up for weeks and even months.

During a livestream by Seattle-based Working Washington, a series of workers described waiting weeks and even months for claims to be processed and being unable to contact the agency.

Also speaking was U.S. Rep. Pramila Jayapal, a Seattle Democrat, who has proposed that the federal government should simply pay employers not to lay off workers in the first place.

“We never should have allowed people to get unemployed in the first place,” Jayapal said Thursday. “We should have subsidized those paychecks. Now, we’re in a situation where we in Congress are fighting to even get the unemployment benefits extended.”

Rising coronavirus infections threaten US economic recovery