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Wolf Richter: Week 9 of the Collapse of the U.S. Labor Market: Still Getting Worse at a Gut-Wrenching Pace

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Wolf Richter: Week 9 of the Collapse of the U.S. Labor Market: Still Getting Worse at a Gut-Wrenching Pace

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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.

Wolf Richter: Week 9 of the Collapse of the U.S. Labor Market: Still Getting Worse at a Gut-Wrenching Pace 2

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:

Wolf Richter: Week 9 of the Collapse of the U.S. Labor Market: Still Getting Worse at a Gut-Wrenching Pace 3

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

 

Wolf Richter: Week 9 of the Collapse of the U.S. Labor Market: Still Getting Worse at a Gut-Wrenching Pace 4

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
1 California 246,115
2 New York 226,521
3 Florida 223,927
4 Georgia 176,548
5 Washington 145,228
6 Texas 134,381
7 Illinois 72,816
8 Pennsylvania 64,078
9 Michigan 54,460
10 Kentucky 47,036
11 Ohio 46,594
12 North Carolina 45,974
13 Virginia 45,788
14 New Jersey 41,323
15 Massachusetts 38,328
16 Maryland 34,304
17 Arizona 32,295
18 Minnesota 31,529
19 Wisconsin 31,314
20 Indiana 30,311
21 South Carolina 29,446
22 Louisiana 28,843
23 Tennessee 28,692
24 Missouri 26,029
25 Connecticut 26,013
26 Alabama 24,528
27 Oklahoma 23,880
28 Oregon 22,281

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
1 Nevada 23.5%
2 Michigan 22.6%
3 Washington 22.1%
4 Rhode Island 19.9%
5 New York 19.6%
6 Connecticut 19.3%
7 Mississippi 18.8%
8 Vermont 18.8%
9 Georgia 18.5%
10 New Hampshire 18.0%
11 Pennsylvania 18.0%
12 Hawaii 17.8%
13 New Jersey 17.8%
14 Louisiana 17.2%
15 Alaska 16.5%
16 California 16.4%
17 Oregon 16.2%
18 Massachusetts 16.1%
19 West Virginia 16.1%
20 Minnesota 15.0%
21 Maine 14.5%
22 North Carolina 14.1%
23 Ohio 14.0%
24 Kentucky 13.4%
25 Montana 12.9%
26 South Carolina 12.9%
27 Illinois 12.8%
28 New Mexico 12.6%
29 Iowa 12.4%
30 Florida 12.1%
31 Oklahoma 11.4%
32 Delaware 11.3%
33 District of Columbia 11.3%
34 Alabama 11.2%
35 Wisconsin 11.0%
36 Tennessee 10.5%
37 Virginia 10.5%
38 Arkansas 10.2%
39 Maryland 10.0%
40 Colorado 9.8%
41 Texas 9.6%
42 Missouri 9.5%
43 Indiana 9.4%
44 Idaho 8.9%
45 North Dakota 8.7%
46 Kansas 8.6%
47 Arizona 7.9%
48 Nebraska 7.1%
49 Wyoming 6.6%
50 Utah 6.2%
51 South Dakota 5.6%

“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.

 

 

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