Initial filings for unemployment benefits increased by 3.8 million in the week ending April 25, a decline of 603,000 from the previous week. More than 30.1 million claims have now been processed by the state agencies in the six weeks since the economies of most states were shut down to prevent the spread of the coronavirus.
Ohio joined seven other states with a million or more people applying for unemployment benefits.
While most states showed significant decreases in claims, though they are still at a high level, four states — Washington, Oregon, Nevada and Georgia – reported significant increases. Jobless claims in Iowa also increased, which matches up with the news of the disease spreading through employees at meatpacking plants.
We do anticipate a surge of claims from Florida because of problems processing first-time claims and from Texas because of the collapse in oil prices and expected surge in bankruptcies around the oil and energy business.
We can expect the trend in initial claims to remain high as state agencies work their way through the population of recently furloughed employees and as state and local government employees begin to be furloughed by revenue-starved states.
This week, Ohio joined seven other states with a million or more people applying for unemployment benefits. And there are 10 states with a half-million newly unemployed persons who are likely to lose their ability to contribute to their state and local economies and to state tax revenue.
All states will need resources to give financial support to those unemployed members of the labor force, and then to help them find suitable employment once the health crisis ends and it’s safe to return to work.
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.
