In a week that the cumulative number of people registering for unemployment benefits passed 50 million, California has now processed more than 6 million initial claims and Florida passed the 3 million mark.
Notable this week was the dispersion of states with significant increases in initial claims.
Notable this week was the dispersion of states with significant increases in initial claims, from the mid-Atlantic states (Connecticut, New Jersey and Maryland) to refinery-centric Texas and Louisiana, the Midwest (Kansas, Nebraska, Iowa) the Southwest (New Mexico and Nevada), and, finally, Tennessee.
The New Jersey Department of Labor reported increases in public sector layoffs and regularly scheduled furloughs at the end of the school year. We can assume that decreased demand for energy products and hospitality have been behind layoffs in Louisiana over the past few weeks. And with several states including Texas now in the process of reversing the re-openings of businesses, we can anticipate more layoffs in the coming weeks.
In all, there were increases in the number of newly filed claims for unemployment benefits in 23 states and districts during the week ending July 4, with 11 of those states reporting increases that were significantly above normal levels. Initial claims were down in 30 states, with 11 of those states reporting decreases that were significantly lower than normal levels.
The figures below provide a synopsis of the damage to the workforce and the increased need for social services and monetary support in the coming months.
Source: BLS, Bloomberg, RSM US
The map below shows three numbers below the state name:
- The cumulative number of initial unemployment claims since March 7, the week before the effect of shutdowns began in earnest.
- The latest increase (decrease) in the number of claims.
- The Z-score of the latest increase (decrease) in claims, which is the number of standard deviations above (below) the pre-coronavirus average.
The first number indicates the depth of the impact of the virus on the labor force.
The second number indicates the direction of the claims (i.e., a first derivative of sorts): positive numbers indicate an increase in claims and labor market distress; positive numbers approaching zero indicate the deceleration in new filings; zero would suggest a plateauing of claims; while negative numbers are an indication that businesses and employees are returning toward normal levels of claims. Negative changes in claims should be viewed relative to the cumulative number of claims.
The third number shows the degree of the shock, with Z-scores outside the range of plus-or-minus two standard deviations considered to be outside of normal occurrences.
For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.