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HEDGEYE FINANCIALS WEEKLY LABOR MARKET READING
Initial unemployment insurance claims (SA), filed in the week ending July 24th, were 1.43 million, up +0.8% w/w.
Cumulative initial claims have now hit 54 million, although this includes a fair amount of duplicate filings and over-counting on both the state and PUA levels.
Pandemic Unemployment Assistance (PUA) claims filed in the week ending July 24th were 830K, down -11% w/w.
Recall, PUAs are part of the CARES Act and cover workers ineligible for traditional state UI assistance, including independent contractors, self-employed individuals, and others as detailed in the CARES Act.
In the past, we had taken the PUA figure boxed in purple in the summary table above to represent the number of continuing PUA claims; however, what we have since learned is that this number does not represent the number of claimants, but rather the number of claimant weeks.
For instance, if a person filed in July for PUA assistance and was eligible retroactively to have begun receiving PUA benefits beginning in March under the CARES Act, the PUA Continuing number would reflect all the weeks from March through July that that person was eligible to collect rather than just the current week.
Given the unprecedented speed with which initial claims have manifested, our view remains that the best way to contextualize the magnitude of the labor market crisis is to look at continued claims.
Continued unemployment insurance claims (SA), the total number of people claiming benefits in all programs for the week ending July 18th, 2020, were 17.0 million, up +5.4% w/w. Continued claims of 17.0 million are currently ~2.57x the previous high-water mark of ~6.6 million set during the financial crisis.
While declining continuing state claims had been a silver lining over the past few weeks, this week's inflection upward, together with re-accelerating new job losses and the growing uncertainty over exhausted and/or expiring household and corporate sector government aid, cast further shadow over the size, speed, and nature of the employment recovery.
Moreover, the downward trend in PUA claims, while positive at face value and when taken isolation, suggests a shift away from temporary, virus-related job loss to more permanent job loss in other industries.