Flashing job warning lights
Major claims data showed a big warning sign about today’s jobs.
Initial claims increased from 1,307 million to 1,416 million, an increase of 109,000. This was the first increase in 16 weeks, a sign that the job recovery may have ended.
Ongoing state claims
Note: My initial claims and continuous claims charts are seasonally adjusted. The following AUP and totals are NOT seasonally adjusted.
Four Continuing Claim Factors
- Continuous claims delay initial claims by one week.
- People can find work and leave unemployment lists.
- People can expire their benefits and leave the scrolls.
- People can withdraw and leave the scrolls.
We are not yet at the point where state benefits have expired according to the Center for Budget and Policy Priorities as explained below,
Basic concepts of unemployment compensation
- Workers in most states are eligible to receive up to 26 weeks of benefits from the regular state-funded unemployment compensation program,
- Six states provide fewer weeks and one provides more.
- Under the CARES Act Responding to Pandemic COVID-19, all states provide an additional 13 weeks of federally funded Emergency Pandemic Emergency Assistance (PEUC) benefits to individuals who exhaust their regular state benefits.
- There are additional weeks of federally funded EB in high unemployment states (up to 13 or 20 weeks depending on state law).
- The maximum number of weeks of Pandemic Unemployment Assistance (PUA) for the exhausted is equal to 39 minus the number of weeks of regular UI and Extended Benefits (EB) received.
- There are no PEUC or PUA available after December 31, 2020.
State exceptions
- Massachusetts provides up to 30 weeks of UI, except when there is a federal extended benefit program (as it is now) or in periods of low unemployment (as was the case until February), when the maximum is reduced to 26 weeks.
- Montana provides up to 28 weeks of UI.
- Michigan typically provides up to 20 weeks of IU, but in the COVID-19 emergency it has risen to 26 weeks.
- South Carolina and Missouri provide up to 20 weeks of UI.
- Arkansas offers up to 16 weeks of regular benefits.
- Kansas was providing 16 weeks of IU before COVID-19, but that was extended to 26 weeks until April 2021;
- Alabama currently provides up to 14 weeks of UI for new enrollees, with an additional five-week extension for those enrolled in a state-approved training program;
- Georgia was providing 14 weeks of UI, but in the COVID-19 emergency it has risen to 26 weeks;
- Florida currently provides up to 12 weeks of UI; and
- North Carolina currently provides up to 12 weeks of UI.
Almost all of the improvement in ongoing claims is because people find work, but people may have abandoned the scrolls in Florida, North Carolina, and Georgia..
State claims provide incomplete picture
State claims do not provide a complete picture because many people are not eligible for unemployment insurance.
For example, freelancers are not eligible for state unemployment insurance even though they pay in the system.
Self-employed workers and small businesses were eligible for loans that, under some conditions, will not have to be repaid. Freelancers are also eligible for 13 weeks of Emergency Pandemic Unemployment Assistance (PEUC) but may have expired.
Primary PUA claims
The primary PUA covers those who are not eligible to make state claims. The report delays initial claims by 3 weeks and continuing claims by 2 weeks.
Based on initial state claims and reverse state reopens, I expect this number to increase in the coming weeks.
All claims continuous
All continuous claims are the sum of state continuous claims plus PUA claims and all other federal programs.
All claims have exceeded 29 million for two months. There was little improvement in the current report.
Almost 32 million people are collecting some form of unemployment insurance and, as noted above, I expect the number to increase.
Federal cuts
According to all ongoing claims, more than 30 million are in the last week of expanded federal unemployment benefits.
Everyone in any unemployment program receives a $ 600 monthly check. Unless Congress acts soon, these $ 600 supplemental checks end and people only receive state unemployment benefits averaging $ 378 per week or primary PUA coverage that it is even less, especially for those who work part time.
If it is not extended, this will be a great success for the income of millions.
Republicans, especially Trump, don’t want to extend this benefit because many earn more by being unemployed than by working.
Instead, Trump proposes a payroll tax cut (see point 3 below), but that’s useless for those who don’t have a job, and Republicans also reject it.
Related Posts
- More than half of commercial closings are permanent
- Banks double loan loss reserves ‘Everyone is fighting’
- Trump’s payroll tax cut and the arrogance of “finding something new”
- Georgia’s greedy improvement was a big lie from the governor
- Home starts and permits improve but not enough
Unprecedented recession timing and what it means
In case you missed it, check out Unprecedented Recession Timing and what it means.
Mish
