One man’s ‘beat’ is another 787,000 “men’s” lost income …. I think is how the saying goes in the post-pandemic (post?) funhouse mirror of relative comparisons.
I covered most of the broader contextualization in the Early Look this morning, so I’ll dispense with the top-down treatment and endeavor to parse the convoluted mix of internals.
- California came back online with respect to data reporting (I thought it would be one more week of pause) and the update pushed both the headline and prior week revisions lower.
- CA reported 158.87K in Initial Claims in the latest week. This compares to the 226.18K they had been reporting in recent weeks as a placeholder value.
- I’ll need to dig further on whether the CA backlog has now been fully processed and whether any of the reported decline in Claims was due to a crackdown on fraudulent claims.
- Recall, Fraudulent Claims were still net (+) for the economy to the extent those dollars were spent. Lower Claims due to fraud crackdown is (obviously) a moral/legal positive but a net negative with respect to dollar flow supporting commerce.
- Continuing Claims are 1wk lagged.
- PEUC Claims – 13 wks of extended benefits after regular state benefits expire - are 2wks lagged.
- Expiring Continuing Claims may flow to PEUC or roll-off altogether.
- Total Claimants – which is 2 week lagged – is inclusive of the flow between these two series.
- A decline in Total Claimants = re-employment or total loss of benefits. It’s difficult to precision parse the extent to which one or the other is the predominate driver of change in Total Claimants.
If we look at the most recent two weeks for which we have both Continuing Claims and PEUC data:
- Week of 10/2: Continuing Claims dropped -1.2M while PEUC Claims rose +510K … so ~43% still unemployed (other 57% = re-employed or total loss of benefits)
- Week of 9/25: Continuing Claims dropped -1.385M while PEUC Claims rose +823K … so roughly 60% still unemployed (other 40% = re-employed or total loss of benefits)
- There is noise and other modest temporal distortion in those numbers but they offer a decent read on the basic dynamic and level of shift at work.
In Other Words ….
The week of 9/18 corresponds to week 26 relative to when Initial Claims first spiked, so we have 3 weeks of comparable Continuing and PEUC Claims data since benefits began to expire en masse.
Over those 3 weeks, Continuing Claims have fallen by -3.35M while PEUC Claims have risen by +1.5M, implying that roughly 45% of the drop in Continuing Claims is due to transitioning over to PEUC Claims. The further implication is that roughly 55% of the drop in Continuing Claims is due to people losing benefits or being re-employed.
In tangible terms, what all this means is that at least half the decline (& potentially significantly more) in Continuing Claims is due to people losing benefit altogether or individuals transitioning to alternative extended benefit programs. In other words, more than half of the "improvement" in Continuing Claims represents individuals who are, in fact, still unemployed.
In other, other words, the payroll improvement remains ongoing albeit at a (still) painfully plodding pace. And the path to full eco and labor marker renormalization remains long and fraught with cyclical, structural, political and socio-economic potholes.
… Alotta words to explain what everyone already viscerally knows to be true and what 23 million+ Americans and their families have been acutely forced to internalize and endure on a daily basis 7 months into a “temporary” shock.