Via Wolf Street

The number of people who newly lost their work and filed for initial state or federal UI during the week jumped to 1.43 million.

By Wolf Richter for WOLF STREET.

What happened in the latest reporting week for unemployment claims was disconcerting: “Initial” claims under state unemployment insurance programs by newly laid-off workers rose. And initial claims under the federal Pandemic Unemployment Assistance (PUA) program provided by the CARES Act that covers gig workers, also rose. This means that people are now losing their work at a faster rate than they did in the prior week.

In terms of “continued” claims: The number of people on unemployment insurance (UI) under state programs (blue bars) declined, as some people returned to work. But the number of people on UI under federal and other programs (red bars) jumped. Combined, the number of people on UI under all programs ticked down by 199k to 28.06 million, the Labor Department reported this morning. It was the least catastrophic reading since mid-May, but still a horrendously huge number, representing about 17.5% of the labor force:

Blue columns:

The number of people who continued claiming unemployment insurance under regular state programs fell by nearly 1 million to 14.27 million (not seasonally adjusted), continuing the fairly consistent downtrend that had started in May.

Red columns:

The number of people on UI under all federal programs and some other programs – after having fallen by 2.4 million last week – jumped by 737k to 13.79 million (not seasonally adjusted), driven by increases in federal Pandemic Unemployment Assistance (PUA) claims and in federal Pandemic Emergency Unemployment Compensation (PEUC) claims:

  • Federal PUA jumped by 502k to 11.2 million contract workers, self-employed workers, etc. who’d lost their work.
  • Federal PEUC rose by 66k to 1.29 million.
  • Extended Benefits fell by 33k to 93k.
  • STC / Workshare fell by 142k to 309k. Under these state programs, an employer avoids layoffs by reducing the number of regularly scheduled hours of work; employees receive some wages plus a pro-rata share of weekly benefits based on the reduction in weekly hours.
  • Federal Employees: ticked down to 14.6k.
  • Newly Discharged Veterans: ticked down to 13.9k.
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The newly-out-of-work: Initial Claims, state & federal:

Initial claims under state programs, filed by newly laid off workers, caused some head-scratching this morning, because they “unexpectedly” rose – and they rose both on a seasonally adjusted basis (by 135k to 1.11 million) and on a not seasonally adjusted basis (by 53k to 892k). So we can’t blame some seasonal adjustments gone awry. This was the first increase since the week ended July 11:


Initial claims under the federal PUA program for contract workers rose to 543k (not seasonally adjusted), from 490k in the prior week.

These state and federal initial claims combined rose to 1.43 million people who newly lost their work and filed for unemployment compensation.

At this rate, about 6 million people per month lose their work and file for unemployment compensation. Thus, for continued unemployment claims of 28 million currently to stay even at this rate of initial claims, 6 million unemployed people must find new work during the month.

This is the dynamic the labor market is facing: 6 million people a month are still getting laid off, and for the labor market to improve, well over 6 million people would have to return to work.

What it boils down to.

Data chaos of the labor market continues with the two government data providers wildly contradicting each other: The weekly unemployment insurance report today by the Labor Department, which shows a still catastrophic situation of over 28 million people claiming unemployment insurance under all programs; and the monthly jobs report by the Bureau of Labor Statistics which asserted that in July, there were only 16.8 million unemployed.

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There is still no clarity. But we know the labor market is still in terrible condition though the peak of the unemployment crisis is likely in the past. But today’s increase in both federal and state initial claims is a disconcerting factor.

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