The insured unemployment rate increased to 10.6% for the week ending Aug. 1, which is above the Bureau of Labor Statistics’ July estimate of 10.2%, implying August nonfarm payrolls may be less robust than expected. The insured unemployment rate represents the number of people currently receiving unemployment insurance as a percentage of the labor force. This is a useful measure of unemployment because there is a verifiable action to track (the act of filing for unemployment insurance). During the past 21 weeks, 56.3 million people have filed for initial jobless claims.
As we enter week 22 of pandemic-induced job losses, the increase in the duration of unemployment is becoming worrisome. July nonfarm payrolls data show the median duration of unemployment had increased to 15 weeks last month, while the average had increased to 17.9 weeks. The Federal Reserve defines long-term unemployment as being without a job for more than 26 weeks. The consequences of long-term unemployment include an erosion of skills and the increasing potential for becoming permanently detached from the workforce.
