UI Claims Drop to New Low Following Updated California Data

Initial unemployment insurance (UI) claims fell last week, partially reversing the previous week's surprise jump. UI claims over the last few weeks have been revised downward significantly, following the revision of California's data. California's updated data, however, still likely reflects the effects of the system reset and shouldn't be read as indicative of conditions on the ground.  

UI claims have stalled over the last three months, languishing near the same level since early August. The sluggish decline in UI claims is a stark reminder of what is at stake as stimulus negotiations drag on. Seven months into this crisis, millions of Americans still rely on unemployment benefits and millions more are exhausting benefits without another safety net. All eyes are on Congress.

Initial UI claims fell by 73,125 to 756,617 from 829,742, on a non-seasonally adjusted basis, according to the latest figures from the Department of Labor for the week ending October 17. On a seasonally-adjusted basis, 787,000 initial UI claims were filed, decreasing from 842,000 in the prior week.

California's data has finally been updated following several weeks during which California's UI system was undergoing improvements. Data over the last few weeks has been revised to reflect claims submitted and processed during the reset period, and it shows that claims have been more modest than previously reported. However, this effect may be directly caused by the system reset as the system accepted or processed fewer new claims. More time is needed to understand whether the recent decline was driven by economic conditions or just system changes.

Pandemic Unemployment Assistance (PUA) claims dropped to 345,440, a slight increase from the prior week, but not large enough to outweigh the decline in UI claims. This brings UI and PUA claims combined to their lowest level since March, though it still marks the 31st week with over 1 million new weekly claims. implemented. Anti-fraud measures are helping to reverse surges in PUA claims seen over the last few months.

Non-seasonally adjusted continuing claims for UI fell to just under 8 million for the week ending October 10, continuing a rapid decline. However, most of the decline is because traditional UI benefits are being exhausted for many unemployed, highlighting the millions of unemployed Americans for whom government relief is starting to run dry.

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