We can add another 1.5 million Americans to the ranks of the newly unemployed. Initial jobless claims for the week ending June 13 are six times higher than the five-year average of 240,000 prior to the coronavirus pandemic. And in the 13 weeks since the shutdown of the economy, state employment agencies have processed 45.7 million first-time claims for unemployment benefits, with 13 states having processed 64% of those claims. These are staggering numbers.
The increase in continuing claims offers a weekly measure of the duration of joblessness. As of June 6, there were 21 million people still receiving unemployment insurance, for an implied unemployment rate of 14.1%.
Nevertheless, there are signs of having hit bottom. The map below shows that only three states (Washington, Nevada and Louisiana) reported increases in initial claims in the latest week that were significantly above normal levels. That could be construed as encouraging if not for the depth of the hole and the uncertainty facing households of individuals without jobs.
The map below shows three numbers below each state name. Those numbers represent:
- The cumulative number of initial unemployment claims since March 7, the week prior to when 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-pandemic average.
The first number indicates the depth of the impact of the pandemic 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.