More Republican States Cut $300 Benefits, as Jobless Claims Fall

More than three-quarters of Republican-led states plan to end an extra $300-a-week in federal jobless benefits early, as unemployment claims reached a new pandemic low, likely triggering a decrease in the number of benefits recipients this summer.

The development came as initial unemployment claims through regular state programs dropped to 444,000 last week, the lowest level since the pandemic hit in mid-March 2020. Weekly claims are still more than double their average of 218,000 in 2019 ahead of the pandemic.

This week Texas, Oklahoma and Indiana joined the list of at least 21 states that are cutting off access to federal benefits early after a much weaker-than-expected April jobs report sparked concerns of labor shortages. States are opting out of the $300 supplemental benefit, extended payments and benefits for gig-economy and other workers not typically eligible for unemployment benefits.

States have announced dates ranging from mid-June to mid-July for when they will stop processing pandemic-related benefits. That means nearly 3.5 million individuals could lose the $300 weekly benefits—which were set to expire in early September—beginning in mid-June, according to estimates by forecasting firm Oxford Economics.

Of those, about 1.4 million will also lose pandemic benefits for gig workers, and about 1.1 million will no longer have access to extended benefits that kick in after claimants exhaust their regular state benefits.

The number of people receiving benefits remains elevated. So-called continuing claims through regular state programs have stagnated between 3.6 million and 4.1 million since March. A total of 16 million people were receiving benefits in the week ended May 1 through one of several programs, including regular state aid and federal emergency programs put in place in response to the pandemic.

Number of people claiming unemploymentbenefits, by programSource: Labor Department* Reflects Pandemic Emergency UnemploymentCompensation for those who exhausted otherprograms. † Reflects Pandemic UnemploymentAssistance for self-employed and others not typicallyeligible.