Initial claims for regular state unemployment insurance totaled 837,000 for the week ending September 19, down 36,000 from the previous week’s upwardly revised tally of 873,000 (see first chart). The four-week average was 867,250, down 11,750 from the prior average. The latest week is the 28th week of historically massive claims. Prior to the lockdowns, initial claims were running around 230,000 (see first chart).
The number of initial claims surged in the initial phase of government lockdowns, hitting almost 7 million for the week ending March 28. Initial claims declined fairly rapidly over the next 10 weeks but since early June, the declines have slowed significantly with some weeks showing slight increases. Persistent initial claims at such a historically high level remain a very troubling sign for the labor market recovery and the economy.
The number of ongoing claims for state unemployment programs totaled 12.363 million for the week ending September 12, down 9,849 from the prior week (see second chart). For the same week in 2019, ongoing claims were 1.397 million. Continuing claims from state programs have trended lower since the peak in March. Over the same period, continuing claims in all federal programs have trended higher, reaching 14.166 million for the week ending September 12.
The total number of people claiming benefits in all unemployment programs including all emergency programs was 26.530 million for the week ended September 12, up 484,856 from the prior week. While there has been improvement from the catastrophic results in March and April, the current level of weekly initial claims is still very high and continuing claims are still massive (see second chart).
Government-imposed restrictions intended to slow the spread of Covid-19 continue to wreak havoc on the economy and the labor market. The longer consumers remain restricted and businesses remain closed or limited, the more uncertain a labor market recovery becomes and the higher the probability of a slow and drawn-out economic recovery.