PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

The Latest Unemployment Claims and the Full Jobless Picture

By at 23 July, 2020, 11:54 am

by Raymond J. Keating-

The initial jobless claims numbers grew worse during the latest week for which we have data. For good measure, a broader look at the labor force shows that the overall unemployment picture is much worse than the topline reported data would indicate.

According to the U.S. Department of Labor, initial jobless claims increased to 1,416,000 during the week ending July 18, up from the previous week’s level of 1,307,000. Since initial claims skyrocketed during the month of March, the number for the week ending July 18 was the first move up.

Source: Federal Reserve Bank of St. Louis, FRED

Keep in mind that at the end of February, initial claims registered 217,000 (all data seasonally adjusted), then rising to a high of 6,867,000 for the week ending March 28, and registering 1,416,000 for the most recent week.

As for continuing claims for the week ending July 11, they registered 16,197,000, which was down slightly from the previous week’s level of 17,304,000.

However, it should be pointed out that the above data refer to the regular state unemployment insurance programs. When all programs are included, the DOL reports, “The total number of people claiming benefits in all programs for the week ending July 4 was 31,802,715, a decrease of 200,615 from the previous week. There were 1,725,953 persons claiming benefits in all programs in the comparable week in 2019.”

Considering that the civilian labor force stood at 159.9 million in June, that means that 19.9 percent of labor force participants were receiving some kind of unemployment aid. That’s far above the stated unemployment rate of 11.1 percent.

This, of course, is all deeply sobering, especially given the fact that the latest increase in jobless claims no doubt reflects the recent spike up in COVID-19 cases in the U.S., and states’ reactions to it.

According to the Johns Hopkins Coronavirus Resource Center accessed on the morning if July 23, the confirmed coronavirus cases in the U.S. registered 3,971,537, with the death count hitting 143,204. This pandemic unfortunately promises to continue to create uncertainty, and to weigh heavily on small business, investment, the economy and jobs until we get effective vaccines and treatments.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

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