The latest initial jobless claims report shows that layoffs of employees were lower in some of the already hardest-hit states, but were widespread nonetheless.
The twin economic powerhouses of the United States, California and Texas, over the past three weeks saw a surge of roughly 2.2 million and 745,400, respectively, in first-time jobless claims. The nationwide increase of 16.780 million in the pace of firings points to what looks to be two consecutive double-digit dips on gross domestic product during the first two quarters of the year.
Layoffs in a state are affected by dependence on hospitality and entertainment, population density and mandatory stay-at-home orders.
Nationally, there were 6.6 million initial jobless claims for the week ending April 4 on a seasonally adjusted basis, which is down about 300,000 from the 6.9 million claims in the prior week.
On a cumulative basis, there have been 16.78 million initial claims for unemployment benefits since March 13.
There are several factors that are likely to affect the spread of layoffs across the states, including the dependence on the hospitality and entertainment sectors, population density and mandatory stay-at-home orders.
As such, we might expect surges of jobless claims in some states to lag those states where the virus has been prevalent and where governors have taken action to prevent infection.
According to a recent ABC News report, these states have yet to institute mandatory social distancing:
- North Dakota
- South Carolina
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 a 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.