Roughly 50 million Americans have filed first-time jobless claims over the past four months, while for the week ending July 4, an additional 1.31 million filed for unemployment insurance.
About 30% of the workforce has experienced a bout of unemployment and income loss since the onset of the coronavirus.
Compared to pre-pandemic employment levels, approximately 30% of the workforce has experienced a bout of unemployment and income loss. That is an extraordinary data point that we anticipate will be taken into consideration as the premature reopening of the economy has translated into an intensification of the pandemic and the policy sector attempts to ascertain what to do next.
In our estimation, further significant fiscal aid should be in the pipeline in contrast with the fiscal fatigue that has clearly emerged inside the political authority.
Once one includes those filing for Pandemic Unemployment Assistance for the week ending July 4, 2.352 million people applied for first-time aid, according to Labor Department data released on Thursday.
While the pace of claims declined for the 14th straight week, it is clear that a combination of backlogs and the pause in the reopening of the economy across 30 different states are contributing to the elevated level of first-time claims and those on all kinds of unemployment benefits.
An additional 1.8 million continuing claims were filed for the week ending June 27 and the implied insured unemployment rate stands at 12.4%, just above the official 11.1% noted in the June employment report and in line with an estimate of the misclassified rate of 12.1%. As of June 30, there are 32.9 million people on some form of unemployment insurance.
From our vantage point, it is that 32.9 million on some form of aid that is the key to setting fiscal policy over the next six weeks.
Given the three cliffs — the July 28 expiration of the federal moratorium on evictions, the July 31 fiscal cliff regarding the CARES Act and the August 8 expiration of the Paycheck Protection Program — not extending or replenishing fiscal aid and legal support to those 32.9 million people makes little policy sense in light of the near-catastrophic unemployment numbers we are experiencing.
For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.