Saturday, October 24, 2020

Labor Market Collapse -- Week 31 -- 23 million Americans collecting unemployment compensation -- down from the peak of 32 million in May, but still high

text added October 25

The United States labor market is wild -- over a million people who had been collecting unemployment compensation are getting hired every week, while almost as many people are losing their work every week, and filing for unemployment compensation. Some companies are hiring lots of people, while other companies are significantly reducing their workforce.

Note: The new in 2020 Federal Pandemic Unemployment Assistance (PUA), is unemployment compensation for self employed (gig workers) people with zero work hours, just like traditional state unemployment compensation, but PUA is ALSO for gig workers who have lost a lot of work hours.

California’s Employment Development Department had lots of fraudulent PUA claims, so they “paused” processing claims on September 19.  California accounts for about a quarter of US unemployment claims. The Department of Labor just used CA's old (last reported) data again and again for its weekly unemployment claims report. So I stopped reporting on total federal and state continuing unemployment compensation payments here for a few weeks.

“Revised reports” from California showed up last week, with prior data revised.  Total continued claims for unemployment insurance under all state and federal programs fell by 1.05 million two weeks ago, to 23.15 million people (not seasonally adjusted), the lowest since early May, according to the Department of Labor. The 23.15 million would be 14.4% of the civilian labor force of 160.8 million people.

The huge jump in total claims in late August and early September was caused by a huge jump in California’s continued PUA claims (part of the red columns) that California revised two week later. Blue columns are continued claims under state programs.

There are two programs under the 2020 CARES Act: PUA for gig workers (for the first time in history), and PEUC to cover workers who not eligible under other programs, or had lost coverage under other programs.

Florida finally figured out how to process and report initial PUA claims on a weekly basis a few weeks ago -- so their claims have been surging.  Florida reported a HUGE 49,641 initial PUA claims, nearly double California’s initial PUA claims (25,168). Florida is still the only state not reporting “continued PUA claims, so total US continued PUA claims are understated.

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