Weekly Jobless Claims Flatten as Recovery Drags On
Initial weekly Unemployment Insurance claims hovered around 1 million as the pandemic continues stalling growth. Seasonally adjusted initial claims were 1.0 million for the week ending August 22, and totals for the week ending August 15 were practically the same at 1.1 million. Continued claims dropped again from the prior week, declining by 223,000 to 14.5 million for the week ending August 15, down 1.5% from the prior week. Since the peak in April, the combined total of initial and continued claims has dropped by a total of 12.3 million.
LaborIQ® by ThinkWhy now estimates unemployment at 16.0% using Unemployment Claims, due to the prolonged economic impact of COVID-19. The total number of unemployment insurance claims has dropped by approximately 1.07 million compared to the past four weeks’ average, suggesting jobs continue to be recovered, but at a slower pace than the initial rebound.
Identifying those industries most affected by unemployment insurance claims can inform talent strategies. A ThinkWhy analysis of recently updated July data reported by 49 states, excluding data for Washington D.C. and Puerto Rico, shows that 17% of continued claims have been filed by workers in Accommodations and Food Services, while Food Preparation and Serving Related Occupations account for 15.4%, 10% are in Retail Trade and 10% are in Healthcare and Social Assistance. Legal occupations account for the lowest percentage at 0.3%, excluding Military Specific Occupations. Workers ages 23-34 make up 27% of those on unemployment insurance.
The updated supplemental federal unemployment benefits now provide $300 per week, down from $600, in states approved for the program by FEMA, which is administering the assistance. Thirty-two states including Arizona, Iowa, Louisiana and New Mexico were okayed for the program as of August 25. The awaited aid applies retroactively to August 1. States have until September 10 to apply for the funds.
Weekly unemployment claims indicate the pandemic continues to inhibit a rebound of the U.S. economy, but the labor market is still progressing. LaborIQ® by ThinkWhy expects initial jobless claims for August to hover around 4.6 million, a large number but also an improvement from recent months. While FEMA administers its financial assistance program to states to support unemployed workers, school districts and universities are assessing the risks of on-campus classes, with some already shutting down fall in-person courses. Significant economic impact in economies around the country will be felt depending on decisions about major events, such as collegiate sport seasons and fan participation, as virus counts remain elevated. The road ahead remains uncertain and, overall, employment gains are expected to slow. Flattening unemployment insurance claims points toward a continued stall of the already slowed recovery.
ThinkWhy continuously monitors and forecasts labor data at all levels, measuring impact to MSAs, industries, occupations, and businesses across the U.S.