There are now five states — California, New York, Florida, Texas and Georgia – that have processed more than 2 million initial claims for unemployment benefits since the outbreak of the coronavirus in March. Six states have registered 1 million or more newly unemployed people and 13 have added at least a half-million to their unemployed rolls.
In all, a cumulative 38.6 million first-time jobless claims have been processed by state employment agencies in the past nine weeks.
Continuing jobless claims, which are reported with a week’s lag, increased to 25 million for the week ending May 9. That increases the implied insured unemployment rate — defined as people receiving unemployment benefits as a percentage of the labor force — to 17.2%.
We expect the Insured unemployment number to increase as newly out-of-work people begin to receive their benefits in the weeks ahead, and for the 14.7% headline monthly unemployment rate reported for April to be exceeded in the months ahead.
Initial jobless claims have been decelerating since their peak on May 28, and this week was the first in which a good number of states (18) reported changes in weekly claims that were not significantly different from normal periods of economic activity.
Only New York, New Jersey, Washington and California reported claims this week that were significantly higher than what would be expected.
Though the volume of new claims is falling, the cumulative impact of the number of out-of-work employees on state budgets and local economies is likely to be staggering for an indefinite period of time.
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 the 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.