By Wolf Richter, editor of Wolf Street. Originally published at Wolf Street
The moment the unemployment crisis stops getting worse and bottoms out would signal the beginning of a recovery of the job market. But instead, it’s still getting worse at a gut-wrenching pace.
In the week ended May 16, state unemployment offices processed 2.438 million “initial claims” for unemployment insurance under state programs, bringing the total number of initial claims over the past nine reporting weeks since mid-March to a mind-bending 38.6 million (seasonally adjusted). The claims reported by the US Department of Labor this morning were over three times the magnitude of the prior weekly records during the unemployment crises in 1982 and 2009.
But It’s Even Worse: 4.4 Million Initial Claims with PUA.
These “initial claims” exclude the gig workers, self-employed, and contract workers who are now eligible to receive unemployment insurance under the special and temporary federal program in the stimulus package, called Pandemic Unemployment Assistance (PUA).
In the week ended May 16, an additional 2.23 million people (not seasonally adjusted) filed initial claims under the PUA program, up from the 850,000 that had filed the week ended May 9, and the 1 million that had filed in the week ended May 2. So in total, when regular initial claims (not seasonally adjusted) and PUA initial claims are combined for the week ended May 16, the total of initial claims (not seasonally adjusted) more than doubles to 4.4 million.
The Number of “Insured Unemployed” Spikes after Last Week’s Calm.
Laid-off workers who filed an “initial claim” for Unemployment Insurance (UI) and state programs and who are still looking for a job a week later are added to the “insured unemployment.” The number of these “continued claims” spiked by 2.525 million to 25.07 million, having weeks ago blown past the pre-Covid-19 record of 6.63 million in May of 2009:
Last week’s “insured unemployed” were heavily revised down today to 22.55 million (seasonally adjusted), just 171,000 above the prior week. And given the enormous magnitude, the revised totals for last week and the prior week look nearly flat in the chart below. However, today’s spike delayed any hopes that the bottom of the unemployment crisis was in
And It’s Even Worse… with the PUA: 27.3 Million.
These “insured unemployed” are those in the regular state UI programs and do not include the PUA claims. Including all types of claims, not seasonally adjusted, the total uninsured unemployed combined surged to 27.3 million.
The 28 States with the Most “Initial Claims.”
California is back in first place, after having dropped to third place last week behind Georgia and Florida. During the early phases of this crisis, California’s weekly initial claims exceeded 1 million. These are the regular initial claims and do not include PUA claims:
|Top 28 States, Initial Claims in the week ended May 16|
The “Insured Unemployment Rate” Per State
The national “insured unemployment rate” for the week ended May 9, also released today, jumped to 17.2%, from 15.5% in the prior week. For comparison, the record in the pre-Covid-19 era was 7.0% in May 1975.
The “insured unemployment rate” for each state, also released today, lags one week behind the national average. The table below shows the “insured unemployment rate” for each of the 50 states and Washington DC in the week ended May 2. There are 38 states plus Washington DC now with a double-digit “insured unemployment rate”; three states sport a rate above 20%:
|Insured Unemployment Rate by state, week ended May 2|
|33||District of Columbia||11.3%|
“Insured Unemployment” are is Different from the Unemployed in the Jobs Report.
In today’s report, the number of “insured unemployed” under all programs, including PUA, of 27.3 million is the number of people with continuing Unemployment Insurance.
By contrast, the number of unemployed in the monthly jobs report is derived from household surveys and does not reflect UI. The household surveys that were collected in mid-April became part of the jobs report released on May 8. For that period in mid-April, the number of unemployed surged to 23.1 million. But not all of the people who are out of a job and are looking for work, as identified by the household survey, receive UI benefits. So the household surveys, when they catch up, should show an even higher number of unemployed than the 27.3 million of “insured unemployment” reported today.