The grim news from the national increase in initial jobless claims, which are adjusted for seasonal effects, was mitigated somewhat by the state-by-state raw counting of first-time filings for unemployment benefits.
Virginia, Indiana and Nevada reported weekly increases in initial jobless claims that were significantly greater than pre-coronavirus norms.
Only Virginia, Indiana and Nevada reported weekly increases in initial jobless claims that were significantly greater than pre-coronavirus norms, while 23 states reported weekly decreases that were significant below normal changes, according to Labor Department data released Thursday.
If it weren’t for the spread of the virus throughout the South and Southwest and into the interior states – and the transient effect of summertime hiring – this week’s data might have offered hope for the health of the economy.
Recall that the weekly change in initial jobless claims is a short-term measure that can be subject to backlogs at state agencies and delays in filings. And as the chart below shows, the weekly level of initial jobless claims has jumped by magnitudes from about 200,000 initial claims per week in normal times to 1.4 million per week. These are abnormal times, and this is the 19th week of staggering losses in employment.
In those 19 weeks, 54.1 million people have gone without a paycheck. Given the current spread of the virus and the reluctance of states to slow the reopening of their economies in some of those hardest hit by the virus, we expect the increase in jobless claims to lag that spread, continuing its haphazard path in the coming weeks.
The figures below provide a synopsis of the damage to the workforce:
Source: BLS; Bloomberg; RSM US
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 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.