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Jobless claims soar in Virginia as fraud cases increase, but claims in U.S. drop as economy heals

Jobless claims soar in Virginia as fraud cases increase, but claims in U.S. drop as economy heals

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Jobless claims drop 13,000 to 553,000 as economy heals

People waited to apply for work during an outdoor hiring event for the Circa resort in Las Vegas this week. The number of Americans applying for unemployment benefits declined last week by 13,000 to 553,000, the lowest level since the pandemic hit last year in March.

While the number of Americans applying for unemployment benefits dropped to the lowest level since the pandemic hit last March, the number of Virginians filing surged to record numbers last week.

Virginia had 37,356 people who applied for unemployment benefits for the first time last week, the Virginia Employment Commission reported Thursday. That’s up 58.2% from the previous week.

That also is the highest level of claims filed in one week since the end of July when 42,966 claims were filed, the commission said.

Most of the increase came from those filing fraudulent claims, commission spokesperson Joyce Fogg said.

She didn’t know how many claims were fraudulent, just saying “a large number.”

To combat fraudulent claims, the commission temporarily suspended its online application system for new unemployment benefit claims on April 6 while it investigated cases. It reopened the online filing system on April 15.

“While the online filing system was down, the VEC was conducting investigations,” Fogg said. “Online is the preferred method for fraudsters. A large number of the increase in claims was fraudsters filing fraudulent claims. We are implementing new measures to block fraudsters while allowing legitimate claims to move forward.”

Virginia had the lowest number of people in months who applied for unemployment benefits for the week that ended April 10. That happened during the week when the online filing system was down.

The number of claims increased 173% the following week — the week ending April 17 — compared to the previous week.

The number of claims in the Richmond region — Richmond and the counties of Chesterfield, Hanover and Henrico — increased 161% last week compared with the previous week. The region had 3,535 claims, up 2,181 from the previous week.

Richmond had the largest number of claims at 2,051, followed by Henrico (657), Chesterfield (640), and Hanover (187).

Across the U.S., the number of Americans applying for unemployment benefits dropped by 13,000 last week to 553,000, another sign the economy is recovering from the coronavirus recession.

The Labor Department reported Thursday that jobless claims were down from 566,000 a week earlier. They have fallen sharply over the past year but remain well above the 230,000 weekly figure typical before the pandemic struck the economy in March 2020.

The four-week moving average, which smooths out weekly gyrations, fell 44,000 to 611,750.

Nearly 3.7 million people were receiving traditional state unemployment benefits the week of April 17. Including federal programs designed to ease economic pain from the health crisis, 16.6 million were receiving some type of jobless aid the week of April 10.

“Layoffs are elevated but are gradually easing, consistent with an economy that is reopening,’’ said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “We expect further declines in filings as businesses move closer towards normal capacity which will boost job growth over coming months.’’

Unemployment claims are a proxy for layoffs, and economists have long viewed them as an early indicator of where the job market and the economy are headed. But the figures have become less reliable in recent months as states struggle to clear backlogs of applications and suspected fraud muddies the actual volume of claims.

The job market has been bounding back in recent months. Employers added an impressive 916,000 jobs in March, and the Labor Department is expected to report next week that they hired an additional 875,000 in April, according to a survey from the data firm FactSet.

The unemployment rate has dropped to 6% from a peak of 14.8% in April 2020. Before the pandemic, unemployment was 3.5% in February 2020.

Employers are beginning to complain that they can’t find workers — despite an elevated unemployment rate.

Americans may be reluctant to return to work because they still fear contracting the virus or because they need to care for children who haven’t returned to school. Another factor could be a federal supplemental unemployment benefit of $300 a week, on top of state aid, that means some low-income workers can earn more from jobless benefits than they did from their old jobs.

Business Editor Gregory J. Gilligan and The Associated Press contributed to this report.

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