Revised Data Show Initial Claims Plateauing
NOTE: California has completed its pause in processing of initial claims and has resumed reporting actual unemployment insurance claims data based on their weekly claims activity. The latest data reflects actual counts for California for the current week and revisions to the two prior weeks.
Initial claims for regular state unemployment insurance totaled 787,000 for the week ending October 17, down 55,000 from the previous week’s revised tally of 842,000 (see first chart). Claims have dropped slightly below 800,000 for just the second time since surging in March (see first chart). The four-week average was 811,250, down 21,500 from the prior average. The latest week is the 31st week of historically massive claims. Prior to the lockdowns, initial claims were running around 230,000 (see first chart). 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 8.982 million for the week ending October 3, down 1.22 million from the prior week (see second chart). For the same week in 2019, ongoing claims were 1.367 million. Continuing claims from state programs have trended lower since the peak in early March. Over the same period, continuing claims in all federal programs have trended higher, reaching 14.198 million for the week ending October 3.
The total number of people claiming benefits in all unemployment programs including all emergency programs was 23.150 million for the week ended October 3, down 1.046 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 (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.
Robert Hughes
Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.
