The 1M Initial Claims march soldiers on as the pandemic plunge in employment pushes into its 24th week.
At some point large number gravity will drag the totals lower as you invariably begin to run out of people to fire …. Although that week isn’t this week and with second round layoffs percolating many will own the dystopian distinction of being laid off more than once.
A few quick bigger picture highlights:
- Approximately 30 states have been approved for reinstated and reduced enhanced unemployment benefits sourced from the (very) finite $44B in disaster relief funds from FEMA. Only a couple have begun disbursing those funds and while benefits will be backdated upon approval, funds are only expected to last a matter of weeks with recipients receiving 30% less than the prior enhanced benefits, at best, and -66% to -100% less at worst (see last weeks note for a fuller review).
- The rolls of those unemployed for 26+ weeks is progressively building (i.e. in the millions and rising) – those individuals will be rolling out of benefit eligibility and at increasing risk of structural unemployment/disaffection/hysteresis.
- As a reminder on a basic filtering of the weekly data … Initial State Claims and continuing PUA claims both overstate the level of job loss (due to multiple filings and catchup effects associated with backlogged claim processing). On the other side, however, continuing or total claims understates the magnitude of impact to aggregate consumption capacity as it doesn’t capture reduced hours or those who don’t qualify for UI benefits.
The Data:
- Initial State Claims = 1.006M = down modestly W/W
- Continuing Claims (1 week lagged) = -223K W/W to 14.54M (but well above estimates for a drop to 14.4M)
- PUA Claims = +608K = rising +82.8K W/W and rising for a 2nd straight week as (re) containment measures continue to roil business operations already operating on the edge of precarity.
- Total Claimants (2 weeks lagged) = 27.2M = down -1.04M W/W … but again, stubbornly elevated with risk skewed to the upside in the coming week(s) given the stall/rise in initial Claims.
The structural damage and scarring continue to take shape even as the labor market wounds remain very much open. Although the huddled and unemployed masses can bask in the sweet solace that Bezos is now worth $200 Billion … which will, of course, “trickle down”, without doubt.
