The number of people who lost their jobs and submitted to the state as a federal UI during the week jumped to 1.43 million. A rate of 6 million a month.
By Wolf Richter for WOLFSTREET.
What happened in last week’s report for unemployment claims was disturbing: “Start” claims under state unemployment insurance programs by newly laid off workers up. And initial claims under the Federal Program for Pandemic Unemployment Assistance (PUA) provided by the CARES law that covers gig workers have also arisen. This means that people have lost their jobs faster than in the previous week.
In terms of “ongoing” claims: The number of people on unemployment insurance (UI) under state programs (blue bars) has decreased because some people have returned to work. But the number of people on UI under federal and other programs (red bars) jumped. Combined, the number of people on UI among all programs ticks by 199k to 28.06 million, the Labor Department reported this morning. It was the worst catastrophic reading since mid-May, yet a terribly enormous number, representing about 17.5% of the workforce:
Blue columns:
The number of people continuing to apply for unemployment insurance under regular state programs dropped from nearly 1 million to 14.27 million (not seasonally adjusted), continuing the fairly consistent downtrend that began in May.
Red columns:
The number of people on UI among all federal programs and some other programs – after falling 2.4 million last week – jumped by 737k to 13.79 million (not seasonally adjusted), driven by increases in federal Pandemic Unclean Assistance Assistance (PUA) claims and claims in Federal Pandemic Unemployment Unemployment (PEUC) states:
- Federal PUA claims jumped with 502k to 11.2 million contract workers, self-employed, etc. who had lost their jobs.
- Federal PEUC claims up by 66k to 1.29 million.
- Extended benefits dropped by 33k to 93k.
- STC / Workshare claims dropped by 142k to 309k. Under these state programs, an employer prevents layoffs by reducing the number of regularly scheduled work hours; employees receive some pay plus a pro-rata share of weekly benefits based on the reduction in weekly hours.
- Advertising by federal employees clicks to 14.6k.
- Claims by New Discharged Veterans: clicks to 13.9k.
The new-out-of-work: initial claims, state and federal:
Initial claims under state programs, filed by newly fired workers, caused some headaches this morning as they rose “unexpectedly” – and they went both on a seasonally adjusted basis (by 135k to 1.11m) and on a non-seasonally adjusted basis (by 53k to 892k ). That we can not blame the adjustments of seasonal adjustments incorrectly. This was the first increase since the week of July 11:
Initial claims under the federal PUA program for contract workers went to 543k (not seasonally adjusted), from 490k in the previous week.
These state and federal initial claims combine rose to 1.43 million people who lost their jobs again and were submitted for unemployment benefits during the week.
At this rate, about 6 million people per month lose their jobs and file for unemployment benefits. So, for ongoing unemployment claims of 28 million at the moment to stay even at this rate of initial claims, 6 million unemployed have to find new jobs a month.
This is the dynamics of the labor market: 6 million people a month are still being laid off, and for the improvement of the labor market, well over 6 million people would have to return to work.
As far as it goes.
Data chaos in the labor market continues with the two government data providers contradicting each other: The Labor Department’s weekly report from the Labor Department today, which shows a still catastrophic situation of more than 28 million people declaring unemployment insurance among all programs; and the monthly job report by the Bureau of Labor Statistics which claimed that in July there were only 16.8 million unemployed.
There is no clarity yet. But we know that the labor market is still in terrible condition, although the peak of the unemployment crisis is probably in the past. But the current increase in both federal and state initial claims is a worrying factor.
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