As of this morning (Thursday, April 2), the U.S. Department of Labor has released the latest week’s unemployment insurance claims. In the week ending March 28, more than 6.6 million Americans filed new initial unemployment claims. This more than doubled the 3.3 million claims filed last week - which itself was briefly the largest single week of jobless claims in U.S. history.
This most recent week’s claims far surpassed economists projections of what the continuing (or escalating) economic damage would be. As the Wall Street Journal went to press late April 1, it was citing a survey of economists who predicted about 3.1 million filed claims — about the same as the week before. The actual result was more than twice the prediction.
The blog begins with a look at national unemployment filings — followed by a state-by-state overview.
National Experience Summarized
Up until the week of March 21, the U.S. had been experiencing an average of just about 250,000 initial unemployment filings per week. As illustrated by the following graph, if one adds the seasonally adjusted figure of 282,000 for the week of March 14 to the 3.3 million filed on March 21 to the 6.6+ million of March 28, the cumulative total claims filed over the last three weeks is about 10.2 million (as a seasonally adjusted figure).
If considered in terms of data that is not seasonally adjusted, the cumulative 3-week claims figure is 9.0 million - as the winter is usually a period of slower economic activity than other times of the year.
This last three-week experience accounts 7.0% of the nation’s 145 million workers covered by unemployment insurance (on a seasonally adjusted basis), or a somewhat lower figure of 6.2% (in raw unadjusted terms). Prior to mid-March, typical weekly filings accounted for less than 0.2% of the nation’s covered job base.
Note: Weekly claims data are not the same as the nation’s unemployment rate — which stood at 3.5% as of February 2020, increased to 4.4% as of March. This is based on survey data which includes unemployed not covered by insurance, as of about March 12 (just before significant layoffs got underway). Due to timing of the survey process, monthly reports likely will understate the actual rate of real-time unemployment over the period that layoffs continue.
STATE-BY-STATE REVIEW
State-level data is summarized on a basis similar to that of the national data — albeit with two caveats:
State-wide data is only available on a basis that is not seasonally adjusted; and
Instead of providing raw numbers of unemployment claim, the analysis normalizes the data across large and small states by discussing unemployment claims as a percentage of each state’s covered employment base.
So, let’s take a look. The following graph shows the experience of each of the 50 states plus territories over the weekly unemployment claim periods ending March 14, 21 and 28. Total claims as a % of the state’s total employment base are depicted in rank order, from the most to least impacted.
On initial review, a few items are noted about this rank ordering:
Pennsylvania and Rhode Island appear to the be most impacted states with unemployment filings through March 28 — with 3-week filings at 13.8% of their respective states’ employment base.
The top 5 most impacted are rounded out by Nevada, Michigan, and Washington — each at about 10+%. This top five grouping includes three industrial states plus Washington affected early with the virus outbreak and Stay Home requirements, and Nevada which is heavily reliant on tourism.
In total, 23 states are more impacted than the national average of 6.2%. This is an interesting mix of states — with representation from both coasts plus some states (such as Michigan, Ohio, Kentucky and Indiana) from the industrial heartland.
Somewhat surprisingly, California, Illinois and New York rank near the middle in terms of layoffs to date. While intensely urban in parts, other significant portions of these states consist of smaller communities that may not yet be as impacted by COVID-19 and associated business curtailment.
Least impacted to date are the Virgin Islands with only 1% of jobs affected — followed by South Dakota. The lesser impacted states appear to be more rural and/or slower to put in place state-wide social distancing, shelter-in-place, business closure, or other lockdown requirements.
All-in-all, this listing indicates a disparate range of employment displacement experience (with anywhere from 1% to 14% of statewide employment affected through March). A logical question is whether this diversity of experience warrants different, custom-made policy and regulatory initiatives, rather than “one size fits all.” The counter-argument is that states with minimal impact are likely to catch up, leveling the playing field, as virus impacts inevitably widen and/or national policy transitions from guidance to mandates.
Look for more to come - with a deeper dive into the linkage between job displacement and COVID-19 experience.
