Research
UI Claims Rise for First Time in 16 Weeks as Expanded Benefits Set to Expire
Daniel Zhao
Chief Economist at Glassdoor | Jul 23, 2020
Unemployment insurance (UI) claims continue to show little sign of improvement as the expanded $600 weekly unemployment benefits are set to unofficially expire in mere days. Measures of UI claims have oscillated over the last few weeks, as seasonal adjustment obscures steady levels of new and continuing claims.
Initial UI claims rose for the first time in 16 weeks, on a seasonally adjusted basis, increasing to 1.42 million from 1.31 million, according to the latest figures from the Department of Labor for the week ending July 18. This mirrors a similar increase last week in non-seasonally adjusted initial claims, which reversed in the most recent data, falling to 1.37 million.
In early July, the seasonal adjustment overstated the rate of recovery, but that effect is reversing now as the seasonal adjustment understates the rate of recovery. During these times, focusing on the non-seasonally adjusted data can help peel back the curtain on the true underlying trend.
Pandemic Unemployment Assistance (PUA) initial claims dropped to 974,999, non-seasonally adjusted. PUA and UI claims combined fell after several weeks of hovering over 2.4 million, but still not enough to reach the lowest point set in mid-June, indicating that layoffs are continuing at an unhealthy level.
Continuing claims for unemployment insurance (UI) improved to 16.2 million for the week ending July 11, 2020, reversing the rise in continuing claims seen last week. The continuing claims data tends to swing on a bi-weekly cycle, but still show a slight improvement compared to two weeks prior. The continuing claims data next week will include the reference week for the July jobs report, to be released on Aug 7, which will give us a clue as to whether to expect the recovery to continue or stall in July.
The expanded $600/week unemployment benefits are set to expire at the end of July, though this week will be the last week for which benefits are paid out. These benefits now comprise a significant portion of income for tens of millions of unemployed Americans and allowing these benefits to lapse risks forcing Americans to cut spending.
The expiration of these benefits sets up a perfect economic storm where the sudden loss of income for millions of Americans combined with rising COVID-19 cases around the country and an already weakening economy combine to derail the fragile recovery.
To speak with Daniel Zhao about today’s report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @danielbzhao on Twitter and subscribe to Glassdoor Economic Research.
In early July, the seasonal adjustment overstated the rate of recovery, but that effect is reversing now as the seasonal adjustment understates the rate of recovery. During these times, focusing on the non-seasonally adjusted data can help peel back the curtain on the true underlying trend.
Pandemic Unemployment Assistance (PUA) initial claims dropped to 974,999, non-seasonally adjusted. PUA and UI claims combined fell after several weeks of hovering over 2.4 million, but still not enough to reach the lowest point set in mid-June, indicating that layoffs are continuing at an unhealthy level.
Continuing claims for unemployment insurance (UI) improved to 16.2 million for the week ending July 11, 2020, reversing the rise in continuing claims seen last week. The continuing claims data tends to swing on a bi-weekly cycle, but still show a slight improvement compared to two weeks prior. The continuing claims data next week will include the reference week for the July jobs report, to be released on Aug 7, which will give us a clue as to whether to expect the recovery to continue or stall in July.
The expanded $600/week unemployment benefits are set to expire at the end of July, though this week will be the last week for which benefits are paid out. These benefits now comprise a significant portion of income for tens of millions of unemployed Americans and allowing these benefits to lapse risks forcing Americans to cut spending.
The expiration of these benefits sets up a perfect economic storm where the sudden loss of income for millions of Americans combined with rising COVID-19 cases around the country and an already weakening economy combine to derail the fragile recovery.
To speak with Daniel Zhao about today’s report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @danielbzhao on Twitter and subscribe to Glassdoor Economic Research.Daniel Zhao
Daniel Zhao is Chief Economist at Glassdoor. On Glassdoor's Economic Research team, he has conducted research using Glassdoor's unique data on a variety of topics affecting job seekers and employers ranging from the health of the job market to pay transparency to employee engagement & retention. His work has been cited in publications like the New York Times, the Harvard Business Review and more. Prior to joining the Economic Research team, he also worked on improving the user experience for Glassdoor’s consumer jobs product and mobile app. He holds a bachelor's degree in applied mathematics and economics from Harvard College.
Tags:BenefitsUnemployment
