Recovery “V-shaped” not now: worse, 30.55 million in unemployment. Week 14 of the US Labor Market Collapse

I had a setback. More than 11 million workers with unemployment insurance. But four states, including Florida, still cannot process federal PUA claims.

By Wolf Richter for WOLF STREET.

This unemployment crisis is changing shape, and some states are still trying to catch up on the torrent of unemployment claims, and some states have yet to figure out how to process unemployment claims under federal programs, including Florida. And so, after three weeks of improvement, the data tracking the unemployment crisis worsened.

The total number of people who continued to receive unemployment compensation in the week ending June 20 under all combined state and federal unemployment insurance programs, including concert workers, increased to 30.55 million people (not seasonally adjusted), according to data from the Labor Department this morning. This increased 1.3 million people from the previous week (29.26 million), and the second highest in history, just below the record during the week ending May 23. V-shaped recovery not now:

Even as workers in restaurants, bars, retail stores, hotels, hair salons, etc., are being called back to work, it is corporate jobs that are being phased out now. Small business layoffs happen quietly, and we rarely see them on the news. But layoffs at big companies are in the news, like Macy’s announcement today that it will lay off 3,900 employees in corporate and management areas, even as it brings back store employees. This is one of the ways the unemployment crisis is changing shape.

The torrent of new state unemployment claims continues.

Not seasonally adjusted, 1,457 million initial claims Under state programs, they were processed in the week ending June 20, compared to 1,433 million initial claims a week ago. These are newly fired people who filed their initial unemployment claims that week. While a fraction of the 6 million range at the end of March, it remains more than double the magnitude of the spikes during previous unemployment crises in 1982 and 2009.

The number of people who continue to claim unemployment benefits after filing their initial claim under state programs at least a week before are considered “insured unemployed.” These “ongoing claims” under state programs fell to 17.92 million in the current week (rom 18.65 million in the previous week).

This decrease in continued claims under state programs shows that more people who had received state unemployment benefits were called back to work than newly fired people.

Federal Programs: Continuing unemployment skyrockets.

Under Pandemic Unemployment Assistance (PUA), which covers concert workers 728,120 initial claims They were prosecuted by 46 states in the week ending June 20.

Four states have not yet figured out how to process these federal claims, compared to six states last week. Eventually, they will resolve it, which will increase PUA claims. These four states are:

  • Florida
  • Georgia
  • New Hampshire
  • West Virginia.

Total, 11,046 million workers continue to receive unemployment compensation for at least a week under the PUA program, an increase of 1.76 million from 9,374 million the previous week. Concert workers now represent 36% of all state and federal unemployment lists.

Under Pandemic Unemployment Emergency Compensation (PEUC), Covering people who have exhausted all rights to state and federal unemployment compensation programs, the total number of continuing claims fell to 851,983.

But 14 states have not yet processed any claims under the PEUC program, including Florida.

Other federal unemployment programs They include those who cover federal employees (15,339 continuous claims) and newly fired veterans (12,483 continuous claims).

Why do I use “seasonally unadjusted” data?

I switched to reporting only non-seasonally adjusted data for unemployment claims weeks ago for three reasons:

  • Seasonal adjustments were not designed for a crisis of this magnitude, and the results went crazy, with much higher unemployment demands in March and April than realistic.
  • The Labor Department heavily reviews seasonally adjusted data the following week, and what it reported the previous week is incorrect. Seasonally unadjusted data is not reviewed the following week.
  • The Department of Labor does not seasonally adjust unemployment claims under federal programs (PUA, PEUC, etc.). To add them to state claims, all data must be “not seasonally adjusted.”

What does this all mean?

Despite the deterioration in “ongoing claims” under state and federal programsI’m still pretty sure that in absolute numbers of UI claims, the unemployment crisis bottomed out in May. But there are some problems and complicated changes …

Seasonal factors. According to the Labor Department, a small part of the damage we saw today was due to seasonal factors, which means they are real layoffs, but they happen every year during this week in June. Based on seasonal factors, the Labor Department “expected” an increase in initial claims from 53,913 the previous week. The actual increase was 24,346 claims. So in DOL theory, and rounded up as it does, this week’s initial state claims showed a seasonally adjusted “28,000” improvement over the previous week. Be that as it may.

The crisis of change of form: Retail and restaurant employees, and some hotel employees, receive a call while corporate jobs are disappearing. This trend will continue. Large companies, including airlines, have already announced layoffs for the coming months.

States and municipalities take time to fire people, but the process has begun. The budgets are in very bad shape and all have a federal bailout. But layoffs or shortened work hours, or partial leaves (like four days a month) are now being worked across the country. Some of them have already happened. Many of them are well-paying jobs.

Beyond the official Data Chaos: There are now 30.55 million people who officially receive paid unemployment insurance, and remained unemployed, and are looking for work, according to the DOL today.

There are many people who are eligible for unemployment insurance whose claims have not yet been processed, including the four states that have not yet processed any PUA claims and the 14 states that have not yet processed any PEUC claims. Therefore, the total should exceed 30.55 million people.

If all claims had been processed across all programs, the total on the unemployment charts could exceed 31 million. This would equal more than 19.6% of the workforce. In other words, the unemployment rate based on those who receive state or federal UI would be 19.6%.

Also, there are people who lost their jobs who are not eligible for any unemployment benefits. And when added to the total number of unemployed, the unemployment rate exceeds 20%.

This is much higher than the nonsense reported by the Bureau of Labor Statistics for May (13.3% without error and over 16% with error). The BLS has simply fallen out of the bottom with its unemployment reports.

The entire market for 3,451 shares minus the “Giant 5” is down 1% since January 2018. But boy, volatility! It would have been better with a despicable savings account. Read… Wild Ride to Nowhere Since January 2018: What the US Stock Market Looks Like Less APPL, MSFT, AMZN, Goog, FB

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