Initial unemployment insurance claims keep dropping, but economists urge caution

According to numbers released Wednesday by the state department of labor, 7,807 Alaskans filed for unemployment last week. 

That’s almost 1,000 fewer people filing for initial unemployment benefits compared to the week prior, but state economist Lennon Weller says it’s not time to start celebrating.

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“These levels are incredibly high — historical, high levels,” he said. “Certainly for this time of year, it’s unprecedented.”

In a normal year, he said, tourism and construction would be heating up around this time. But economic impacts from the coronavirus have slowed hiring for the summer season. Weller said many of those people don’t show up in the latest numbers. 

“Normally this time of year individuals who have been filing throughout the winter will begin to return back to work, so a large portion of what we’re seeing in these declines week-to-week is in fact individuals who are exhausting their regular UI durations,” he said. 

New legislation in the CARES Act allowed unemployment benefits to be paid for an additional 13 weeks after the normal 26 weeks of unemployment insurance expires. But Weller says many of the workers who qualify for those extended benefits weren’t counted in this week’s numbers. Those numbers, as well as numbers from the Pandemic Unemployment Insurance program for non-traditional workers, likely won’t be released for several weeks, suggesting that the actual downturn in the labor economy is much worse than unemployment numbers suggest. 

Chart from Alaska Department of Labor

But it’s not just the pandemic that is causing problems. Weller says that the downturn in global oil demand and prices is also having a significant effect on the state’s labor market, and will continue to cause job cuts. 

“I think we’re likely to still see some layoffs from that sector. We’re already seeing them to a certain extent but if these prices persist I wouldn’t be surprised to see those layoffs continue,” he said.

And when will the boost from the reopening come? Weller says that rehires haven’t been showing up in the numbers, perhaps because many businesses are deciding things still don’t pencil out with capacity restrictions. 

Lex Treinen is covering the state Legislature for Alaska Public Media. Reach him at

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