Initial Claims Remain Above 1,000,000
The US Department of Labor reports In the week ending August 22, the advance figure for seasonally adjusted initial claims was 1,006,000, a decrease of 98,000 from the previous week's revised level. The previous week's level was revised down by 2,000 from 1,106,000 to 1,104,000. The 4-week moving average was 1,068,000, a decrease of 107,250 from the previous week's revised average.
The string of 20 straight weeks above the million mark just ended 3 weeks ago but claims are back above that milestone for the last two weeks.
Continued Claims in 2020
Continued claims, not initial claims show the real problem.
Continued state unemployment claims showed a bit of further improvement but progress is agonizingly slow with continued claims at 14,535,000.
The BLS reference week for the next jobs report is the week that contains the 13th of the month. That's the week that determines the official unemployment rate.
Last week I stated "If trends hold, continued claims for the reference week will be about 14,500,000."
Here we are.
At the current rate of improvement claims will be above 10 million for months.
The reference week pertains to the BLS jobs report on the first Friday of every month. The data suggest a slight improvement in the official unemployment rate, not to be confused with the real unemployment rate.
Perspective on Continued Claims
Only a long-term picture describes the unprecedented nature of what's happening.
Four Continued Claim Factors
- Continued claims lag initial claims by a week.
- People can find a job and drop off the unemployment rolls.
- People can expire their benefits and drop off the rolls.
- People can retire and drop off the rolls.
Note: My Initial Claims and Continued Claims charts are Seasonally-Adjusted. The following PUA and Totals are NOT Seasonally-Adjusted.
Primary PUA Claims
Primary PUA covers those who are not eligible to make state claims. People working part-time can also claim PUA.
The report lags initial claims by 2 weeks and continued claims by 1 week.
Primary PUA claims hover near the 11 million mark.
PUA claims are not seasonally adjusted.
All Continued Claims
No Double Counting Just Misleading
All Continued Claims is sum of all the various programs.
There is no double-counting as widely reported.
One either applies at the state level or the Federal Level, not both. And one must first apply at the state level.
There are currently 27,017,232 people collecting pandemic assistance. Confusion stems from the fact that not all of those people are unemployed.
PUA allows part-time workers to apply. They will not show up in the monthly jobs report as unemployed.
There are also some collecting PUA who are genuinely unemployed who simply do not qualify for any state programs.
Number of Unemployed
The number of unemployed is somewhere between 14,535,000 (continued claims) and 27,017,232 (all claims).
My guess is around 20,000,000 but the BLS will report far less due to extremely strict counting guidelines plus admitted errors.
It's important to note that those on PUA who are not working part-time have no money coming in.
Individuals must first apply at the state level. If not covered then they can apply for PUA. Persons who qualify at the state level get state benefits plus PUA. This is part of the double-counting confusion.
Those on PUA but not a state program have no money coming in unless they are working on the side.
Due to Congressional bickering the last PUA check is for the week ending July 25. Today is August 20.
Trump authorized another $400 but with states having to supply $100, so really the authorization is $300.
Authorization is one thing sending out checks is another. This will be the fifth missed check for those receiving PUA.
- Trump Signs 4 Executive Orders, One Requires States Pay 25% of the Cost
- Boston Fed President "The Recovery is Losing Steam"
- Millennials Screwed Again, This Time on Unemployment
- Heaven Help Us if Unemployment Follows the Path of the Great Recession
Point number 4 is particularly ominous.