Holding Pattern

Initial claims fell from 806,000 to 787,000 in the last week of 2020.

They have largely been in an elevated holding pattern since the beginning of September. In that period the low was 711,000 on October 31, and the high was 893,000 on September 5.

4-Week Moving Average of Initial Claims

4 week moviing average Initial Claims in 2020  Dec 31 Report

In what might be an ominous sign, the 4-week average bottomed on November 14 at 743,500 and has generally been rising since.

The 4-week average ticked up again in the final week of the year to 836,500.

Continued Unemployment Claims 

Continued State Unemployment Claims in 2020  Dec 31 Report

Continued claims represents the number of people in regular state unemployment programs.

The number is a huge distortion of reality because people fall off the rolls as benefits expire.

When people exhaust state benefits they roll into PEUC benefits or PUA benefits, and in some cases back into state benefits.

Millions of people exhausted their PEUC and PUA benefits as well. 

Pandemic Emergency Unemployment Claims (PEUC)

PEUC Claims in 2020  Dec 31 Report

PEUC benefits kick in after people have exhausted regular state benefits. 

PEUC counts are generally accurate as states do a good job of weeding out applicants because the states, not the Federal government, are on the hook.

There was a big jump in PEUC claims in September because that is when people in some states exhausted their state unemployment benefits.

The acceleration flattened in November as people exhausted their PEUC benefits as well.

Thus, although accurate, the current count of nearly 4.8 million understates the problem. 

Pandemic Unemployment Assistance (PUA) Claims

Primary PUA Claims in 2020  Dec 31 Report

PUA claims cover part-time workers, the self-employed, and others who do not qualify for regular state benefits.

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The PUA program is rife with fraud, double-counting, and reporting errors.

That said, some percentage of PUA claims are not fraudulent.

But fraudulent or not, some people have exhausted all of their PUA benefits.

Fraud aside is the number of people collecting benefits closer to 9 million, 7 million, or 5 million?

No one seems to have the answer, typical for a Federal program rife with graft. 

All Continued Claims

All Continued Claims in 2020  Dec 31 Report

All continued claims dropped in the final week of 2020 to 19.564 million.

It is the total of all the above except the initial claims charts. 

Since it contains PUA, no one really knows what the number is. Nor would we know how much fraud is in the number, even if we did have a better handle on the number. 

Expired Benefits

Millions of people used up all their benefits so the PEUC and continued claims numbers are artificially low. 

It's difficult to say if PUA is low due to expired benefits or high due to double counting errors. 

Perhaps it balances out.

What About the Vaccines?

Vaccines are an unknown as are additional state lockdowns due to the new, more viral Covid strains circulating.

Where to in 2021?

Congress extended and Trump just signed an extension to PEUC and PUA. 

As a result, some people who expired all their benefits are again eligible for benefits through March or April. 

Thus, I expect the continued claims, PEUC, and PUA numbers to tick up again. Then it's wait and see on lockdowns and the vaccines.

For a discussion of the extended benefits and amounts, please see Trump Signed the Bill, What Unemployment Benefits Are Extended?

Best wishes to all in 2021.

Mish