Ongoing government-imposed restrictions intended to slow the spread of Covid-19 continue to wreak havoc on the economy and the labor market. The longer 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.
Initial claims for regular state unemployment insurance totaled 881,000 for the week ending August 29, a drop of 130,000 from the previous week’s 1.011 million (see first chart). The latest week is the lowest level since the implementation of lockdowns in March. However, the latest week also marks the 24th week of historically massive claims. Prior to the lockdowns, initial claims were running around 230,000 (see first chart). Initial claims for state unemployment insurance had posted 15 consecutive weeks of decline from April 4 through July 11 but since then, claims have increased three times while declining four times. While the trend is downward, the pace of decline has slowed.
The number of ongoing claims for state unemployment programs totaled 13.254 million for the week ending August 15, down 1.238 million from the prior week. The insured unemployment rate for these programs was 9.1 percent, down from 9.9 percent in the prior week.
The total number of people claiming benefits in all unemployment programs including all emergency programs was 29.225 million for the week ended August 15, up 2.195 million 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 by historical comparison (see second chart).
The national Employment Situation report for August is scheduled for release on Friday, September 4 and is expected to show a gain of 1.4 million jobs, pushing the unemployment rate down to 9.8 percent from 10.2 percent in July.