Today’s DOL Unemployment Insurance Weekly Claims shows no improvement in the employment situation.
The non-seasonal adjusted initial claims at 1,370,947 are down by 141,816 when compared to the previous week, Also the non-seasonal adjusted continuous insured unemployed at 16,390,919 have decreased by 930,294 over the last week, which is encouraging. Also, the total persons claiming some form of UI benefit decreased by 200,615 to 31,802,715. (Last week figures were upward revised from 31,491,627 to 32,003,330.) These figures signal that there is no significant improvement in job losses, or return to work numbers due to easing of the Covid-19 recession.
The figure below shows that currently, the lowest unemployment rate should be 19.9%. And, if one added the historic 2.6% UCR-PCR spread, then the actual unemployment rate should be 22.5%. Hence there is no improvement in the recovery of jobs and number of persons out of work.
In the current Covid-19 situation, we believe that the only meaningful figures from DOL’s weekly report are:
- The non-seasonal adjusted Insured Unemployed.
- The total of all persons claiming unemployment benefits in all programs, which includes persons receiving Covid-19 relief who would normally not fall into the insured employed, e.g. self-employed tech workers.
- The monthly unemployment rate (UER) as published by the BLS, plotted 2 weeks earlier from the reporting date. (The May UER which is published beginning June is plotted from mid-May to mid-June.)
- The insured unemployed rate (IUR) is the percentage of insured unemployed persons (not seasonally adjusted) of the labor force. (The number of insured unemployed is published every Thursday, looking back 2 weeks in the DOL’s weekly Unemployment Insurance Weekly Claims report. The labor force is published monthly by the BLS with the Employment Situation Summary.)
- The unemployed persons claiming rate (PCR) is the percentage of persons of the labor force claiming UI benefits in all programs, including the insured unemployed. (The total number of persons claiming benefit is published weekly looking three weeks back.)
- The spread UER-IUR, historically at 2.6% (2019 average).
- The spread UER-PCR, also historically at 2.6%, as the majority of persons claiming benefit were the insured unemployed.
A recovery would be indicated by the following:
- A significant and continued decline in the insured unemployment rate, together with a
- significant decline of total persons claiming benefit, which implies
- the spread UER-PCR approaching its historic value of 2.6%.
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