Arizona unemployment claims rise even as state loosens restrictions on businesses

New figures from the Department of Economic Security show that 23,037 people filed for first-time jobless benefits in the past week. That’s up from fewer than 22,000 the week before.

On one hand, those numbers are a sharp decline from what happened to the Arizona economy after Ducey imposed his stay-home order and ordered the closure of all but businesses he considered essential. That led to claims for basic state unemployment benefits, which previously had been running in the 3,500-a-week range, ballooning past 132,000.

But University of Arizona economist George Hammond says the state is far from being out of the fiscal woods.

He told Capitol Media Services that some sectors of the economy, like bars and restaurants, are finding they really can’t return to prepandemic business levels because of social-distancing restrictions. At the same time, many Arizonans are not confident about the safety of going back out, at least not yet.

And that, Hammond said, will lead to new layoffs as well as some people who had only been furloughed realizing that they’re not going to be called back and deciding they need unemployment benefits.

The DES report came as the Department of Health Services logged an additional 23 deaths from COVID-19 on Tuesday, bringing the statewide tally to 1,070. Total cases increased by 618 to 28,296.

The governor has said repeatedly that the increase, at least in cases, reflects the fact the state is doing more testing. More people getting checked out, he said, means more cases will be found.

But Tuesday’s report from the DHS suggests there’s more going on. The number of hospital beds in use statewide by COVID-19 patients is 1,243. That compares with about 730 a month earlier.

Breaking down the numbers even further, there were 438 intensive-care beds occupied by those with the virus on June 8 — a record. Also setting a record were the 848 cases of the virus in hospital emergency rooms, up from 454 just a month earlier.

The new report on first-time jobless claims, directly linked to the pandemic and the governor’s subsequent orders, shows the trends are less clear.

The DES reports the number actually increased from the prior week. But the figures are complicated by questions about how the agency tracks the applications.

Since the governor put his orders in place, the agency lists nearly 650,000 Arizonans who have sought basic state benefits to those who lose work through no fault of their own. They’re entitled to half of what they were making, subject to a cap of $240 a week, the second-lowest payout in the country.

Only thing is, DES officials say there could be some duplication in those numbers.

For example, some companies are furloughing workers one week out of every month. Agency spokesman Brett Bezio said the question of how they are counted depends on whether they simply reopen existing claims every four weeks or file new ones.

Then there’s the separate Pandemic Unemployment Assistance program, which provides up to $600 a week for those who are not eligible for regular state unemployment benefits, like the self-employed and workers in the “gig” economy like drivers for Lyft and Uber who are classified by those companies as contractors.

The DES reports there were 96,416 initial claims this past week for this coverage, bringing the total number of claims to nearly 295,000. But here, too, Bezio said the agency cannot say how many of these people applied initially for regular jobless benefits — and are included in those numbers — before seeking PUA when they were determined ineligible, versus those who applied solely for PUA benefits.

But the bottom line remains that, whatever the counting methodology, Arizonans are continuing to apply for aid.

Hammond, the director of the Economic and Business Research Center at the University of Arizona’s Eller College of Management, said the numbers reflect the diversity of the state economy — and the fact that not all sectors are recovering at the same rate.

However, he expects a strong recovery in the health-care industry.

There had been some lags there when the governor declared a ban on nonessential surgeries and medical procedures in a bid to ensure there were not just enough hospital beds but also sufficient protective equipment, like gowns, masks and gloves. Ducey has since told medical providers they are free to resume elective surgeries.

And everyone else?

“In other sectors, where the fear isn’t so great, they’re going to rehire,” Hammond said. “We’re going to see the layoffs gradually drift down.”

That, in turn, goes to the part of the problem unrelated to gubernatorial directives: vonsumer confidence.

“That’s really the million-dollar — or billion-dollar question,” Hammond said. “How safe will people feel going back into restaurants, bars, hotels, motels, sporting events once those start back up?”

And there’s another side to that. “How safe do employees feel going back to work and dealing with people?” Hammond asked.

OpenTable, which helps people book reservations online, reports that dine-in seating at Arizona restaurants on Monday was down just 37.4% from the same period a year earlier. Just a week earlier, the figure was a 60% year-over-year drop.

By contrast, OpenTable reports seated dinners from online, phone and walk-in reservations in California are still almost 79% less than last year. And in New Mexico the decline is nearly 70%.