New claims for unemployment at 7/11/20 continue at high level. Good news is new jobs continue to be higher than lost jobs.

Image courtesy of Adobe Stock.

I’ve been scratching my head for a long time wondering how the tally of new unemployment claims can continue at skyhigh catastrophe levels while the unemployment rate has not gone vastly higher than it already has.

Head scratching from another direction – Number of new claims is steady at a level that is at least six times higher than it was right before the pandemic started yet the number of people drawing unemployment is declining.

How can that be?

 

Think I have finally sorted out the answer after several weeks of looking at additional data:

  • The number of new jobs created each week is running far higher than the number of lost jobs.

To get to this point for yourself, compare the number of people drawing unemployment with the change from week to week, add in the number of new unemployment claims, and then plug the difference as people who have gone back to work meaning they have found a job. It is too early for people to dropping off unemployment because their allowed weeks gas run out so the change in people drawing unemployment has to be new jobs. Let me know if I missed something in this concept.

Here is my analysis of the number of people drawing unemployment, the number of new claims, and the resulting number of new jobs:

week new back to # drawing
ended claims work unempl.
6/13/2020   1.54    20.29
6/20/2020   1.48  2.54    19.23
6/27/2020   1.41  1.88    18.76
7/4/2020   1.31  2.31    17.76
7/11/2020   1.30  1.72    17.34

 

Data source

Weekly press release from the Department of labor: Unemployment insurance weekly claims

Number of people drawing unemployment

Here is the weekly tally of people drawing unemployment, which is revised in the subsequent week:

  • 20.29M revised down from 20.5M- 6/13/20
  • 19.23M revised down from 19.52M – 6/20/20
  • 18.76M revised down from 19.29M – 6/27/20
  • 17.76M revised down from 18.06M – 7/4/20
  • 17.34M – 7/11/20

Seasonally adjusted insured unemployment rate

The number of people drawing unemployment is dropping each week. The trend of adjustments is the number is revised down every week for the last month.

You can see mine scratch my head by looking at to the advance seasonally adjusted insured unemployment rate, which is steadily dropping:

  • 12.9% revised down from 13.2% – 6/20/20
  • 12.2% revised down from 12.4% – 6/27/20
  • 11.9% – 7/4

Summary of new claims and running total

Below is my running tally of the new unemployment claims. Table shows weekly claims in millions and as a percentage of February civilian labor force. Several subtotals are presented.

unemployed % of Feb PUA % of Feb
2/1 to 3/14 ave.          0.22
——  —-
3/21/20             3.3 2.0%
3/28/20             6.9 4.2%
4/4/20             6.6 4.0%
4/11/20             5.2 3.2%
4/18/20             4.4 2.7%
4/25/20             3.8 2.3%
earlier    1.6 1.0%
5/2/20             3.2 1.9%    1.0 0.6%
5/9/20             2.7 1.6%    0.8 0.5%
5/16/20             2.4 1.5%    2.2 1.4%
5/23/20             2.1 1.3%    1.2 0.7%
5/30/20             1.9 1.1%  ???
6/6/20             1.6 1.0%    0.8 0.5%
6/13/20             1.5 0.9%    1.7 1.0%
6/20/20             1.5 0.9%    0.7 0.4%
6/27/20             1.4 0.9%
7/4/20             1.3 0.8%
7/11/20             1.3 0.8%
 —-  —-  —-  —-
shutdown subtotal          51.2 31.1%    10.0 6.1%
2/20 civilian labor force        164.5

 

Pandemic Unemployment Assistance

The PUA data is a bit odd. This week the PUA count is cumulative. Most weeks it is a count for the week. There appear to be some oddities in how the data is accumulated or how it is reported. Above table lists an adjustment to tie in to the cumulative data reported for week ending 6/27. I am having a hard time tracking is because I realized the only data reported in the weekly press release for PUA is number currently drawing that specific form of unemployment. New claims are listed anymore, at least in the press release. Thus I have removed the data for PUA since 6/27.

The California Employment Development Division describes PUA as:

As part of the federal CARES Act, the new Pandemic Unemployment Assistance (PUA) program helps unemployed Californians who are business owners, self-employed, independent contractors, have limited work history, and others not usually eligible for regular state UI benefits who are out of business or services are significantly reduced as a direct result of the pandemic. The provisions of the program include:

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