Michigan Live reports Over 1 Million Michigan Residents Have Filed for Unemployment.

More than 1 million people - over a quarter of Michigan’s workforce - have filed for unemployment during the COVID-19 pandemic, the state’s top labor official said Monday.

Last week, Michigan reported more than 828,800 unemployment claims filed in the state from March 8 to April 4. Michigan’s pre-coronavirus record for new unemployment claims occurred during the Great Recession in January 2009, when there were 77,000 claims in a week.

Website Crashes

Also note Michigan unemployment website crashes again, delaying state update on expanded benefits.

In an embarrassing twist Monday morning, Michigan's unemployment website crashed — again — but this time just as the head of the state labor department was expected to outline how the state would apply benefits for self-employed workers.

Just hours earlier, the unemployment website announced "self-employed workers, gig workers, 1099-independent contractors and low-wage workers can now apply for federal benefits online," but, when attempting to file, an error message popped up: "This site can’t be reached."

This is at least the second time the site has crashed since the coronavirus outbreak, as an overwhelming number of Michiganders attempt to file for benefits. More than a million claims — more than a quarter of the state's workforce — have been filed, the director said.

Michigan Labor Force

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The above table courtesy of the BLS. Numbers are in thousands except for the unemployment rate.

Crunching the New Unemployment Rate

1 million new + 180,000 existing / 4.95 million = 23.8%.

Unfortunately, the servers crashed from overload just yesterday. There is a new pool of eligible workers who need to file a claim but can't. There are likely hundreds of thousands more more yet to apply.

If we estimate 250,000 such claims, we can calculate as follows:

1 million new + 250,000 expanded + 180,000 existing / 4.95 million = 28.9%.

National Unemployment

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Michigan provides strong evidence that my calculations of 20-22% national unemployment is in the ballpark, if not outright conservative.

I came up with those numbers two ways.

  1. April 9: 16.78 Million Unemployment Claims in Last 3 Weeks
  2. April 6: How High Will the Unemployment Rate Rise in April?

Judging from unemployment claims I came up with 20%.

On April 6, I looked at high risk areas including food and drinking pace employment and came up with 21-22%.

Click on the above links for details and assumptions.

Official Determination

Bear in mind that the official unemployment rate does not come from unemployment claims. Rather it comes from the Household Survey.

The reference period week for determining the unemployment rates is the week that that contains the 12th of the month. That means the reference period is now: April 12-18.

The better the unemployment rate looks in the May report (for April), the more likely hours will be reduced across the board somewhere else.

The U-6 unemployment rate which counts people working part-time who want a full time job can easily top 30%.

What's Next?

For a 20-point discussion of what to expect, please see Nothing is Working Now: What's Next for America?

The huge fear now is How Do I Pay the Bills?

This is the second crisis in 12 years. These scars will last.

No V-Shaped Recovery

Add it all up and you should quickly arrive at the correct viewpoint: The Covid-19 Recession Will Be Deeper Than the Great Financial Crisis.

Mike "Mish" Shedlock

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