Another 2.1 million first-time unemployment claims were processed by state employment agencies for the week ending May 23, with 323,000 less than the prior week but still 10 times the normal amount.
Because of the staggering magnitude of initial claims, it seems premature to declare the end of the rush to collect unemployment benefits. Still, only six states reported significant increases during the period – West Virginia, Kentucky, Oregon, Iowa, North Dakota, and Alaska – and there was a 3.9 million drop in continuing claims, which likely reflects the partial reopening of local economies.
The 11 states with at least one million initial claims comprise 59% of the total initial jobless claims filed since the coronavirus outbreak shut down work in most states.
Initial jobless claims have been decelerating since their peak on May 28; for the second week in a row there were 21 states reporting changes in weekly claims not significantly different than during normal periods of economic activity. Though the volume of new claims is lessening, 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 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-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 to 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.
