By Kate King 

First-time applications for unemployment benefits jumped in New York and New Jersey last week as the economic fallout from the coronavirus pandemic drags on.

Initial jobless claims in New York totaled 71,641 last week, a 13.3% increase from the prior week, according to the state Labor Department. In New Jersey, initial jobless claims increased 25.6% last week, to 24,633, according to the state Labor Department and Workforce Development.

"New Jersey workers continue to struggle with the weight of unemployment and underemployment, and the accompanying financial worries of not having a job," Labor Commissioner Robert Asaro-Angelo said in a statement.

Jobless claims held steady in Connecticut last week, at around 5,000, according to numbers reported to the U.S. Department of Labor. Nationwide, 870,000 applications for unemployment benefits were filed, an increase of 4,000 from the prior week.

The three states are starting to release supplemental unemployment benefits under an executive order signed by President Trump last month. New York has paid out about $1.9 billion to more than two million unemployed residents eligible for the extra $300 in weekly benefits, Labor Department officials said last week.

The program, which uses funding from the Federal Emergency Management Agency, allows states to apply for up to six weeks of extra benefits. A previous federal program that provided $600 in weekly payments on top of regular state unemployment benefits expired at the end of July and hasn't been extended by Congress.

Niagara Fall, N.Y., resident Paul Mayes said the extra $300 in weekly benefits -- $263 after taxes -- helped him make ends meet after the $600 payments ended. Mr. Mayes, who was making between $500 and $800 a week as a dishwasher at a casino before he was laid off in March, said he couldn't afford to buy his family groceries on his state unemployment benefits alone, which totaled $309 a week after taxes.

"You gotta choose between making a rent payment or getting food," said Mr. Mayes, 33 years old.

Mr. Mayes returned to work this week, but said he's only getting 40 hours a week compared with before the pandemic, when he earned 20 to 30 hours a week in overtime. He is struggling to cover his expenses and applied for rental assistance and food stamps, but said he and his wife earn too much to qualify.

"I live it one day at a time and I pray to God that my bills are paid," he said.

Erica Groshen, senior labor-economics adviser at Cornell University, said the extra unemployment benefits were a lifeline for low-wage workers, who have been more likely to lose their jobs during the pandemic and often have little savings to weather financial crises.

"Now, with that gone and also with the duration of unemployment starting to rise, I think we can expect to see more evidence of financial distress," she said.

Ms. Groshen, a former commissioner of the U.S. Bureau of Labor Statistics, said Congress should renew the supplemental unemployment benefits and invest in infrastructure projects to prevent the economy from spiraling.

"Pandemics are expensive and we're crazy to think that it's not going to be costly to fight the impact of the pandemic on all fronts," she said.

New Jersey has been approved for six weeks of extra benefits and expects to start distributing them next month, according to state labor officials. Connecticut has also been approved for six weeks and so far has distributed nearly $300,000 in benefits, a spokeswoman for the state Labor Department said.

Laid-off workers receiving at least $100 in weekly state unemployment benefits are eligible for the extra $300.

Write to Kate King at Kate.King@wsj.com

(END) Dow Jones Newswires

September 24, 2020 20:04 ET (00:04 GMT)