Via Wolf Street

During the week, 1.49 million newly-out-of-work people filed for state or federal unemployment insurance. A huge number of job losses. But more people returned to work.

By Wolf Richter for WOLF STREET.

The number of people who continued to claim unemployment insurance under all state and federal unemployment programs, after having risen in the prior week, fell by 3.07 million to 28.26 million (not seasonally adjusted), the first reading below 30 million since June, as both, continued claims under state programs and continued claims under the federal programs provided by the CARES Act declined, according to data released by the Department of Labor this morning. This was the lowest – least catastrophic – reading since June 13:

Blue columns:

A still enormous number of people – 15.2 million – continued claiming unemployment insurance under regular state programs, “not seasonally adjusted,” but this was down by about 625,000 from the prior week and continued the fairly consistent downtrend that had started in May.

Red columns:

This is where the big move took place. The number of people who continued claiming unemployment insurance under all federal and other programs – after having jumped by 1.5 million in the prior week – fell by 2.44 million to 13.05 million, the lowest since June 20. The decline was driven by a massive plunge in continued claims under the Pandemic Unemployment Assistance (PUA) program that covers gig workers.

PUA: The number of people who continued claiming unemployment insurance under the federal Pandemic Unemployment Assistance program – contract workers, self-employed workers, “gig” workers, ranging from coders to drivers – fell by 2.23-million, to 10.72 million.

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PEUC: But the number of people claiming continued benefits under the federal Pandemic Emergency Unemployment Compensation (PEUC) rose by 67,000 to 1.22 million.

Extended Benefits: Nearly doubled to 125,659. This covers workers who have exhausted regular unemployment insurance benefits during periods of high unemployment. It provides up to 13 additional weeks of benefits when a State is experiencing high unemployment, and up to 20 weeks in some states. This category will balloon as the unemployment crisis drags on and people who still haven’t found a job fall off the regular unemployment rolls.

STC / Workshare: ticked up to 451,485 continued claims. These state programs “allow an individual who is employed for a portion of the week to collect UC. Under STC, an employer elects to avoid layoffs by reducing the number of regularly scheduled hours of work for all, or a group of, individuals during disruptions to a firm’s regular business activity….” STC “provides individuals a pro-rata share of weekly benefits based on the reduction in weekly hours of work.”

Federal Employees: ticked down to 15,061 continued claims.

Newly Discharged Veterans: ticked down to 14,225 continued claims.

Newly out of work: Initial Claims, state & federal:

Initial claims under state programs, filed by newly laid off people who’d been regular employees, though still catastrophically high during the week, were on a “not seasonally adjusted” basis below the 1-million mark for the second week in a row, at 831,856, down from 988,309 last week, “not seasonally adjusted.”

Initial claims are now for the first time below the catastrophic peak of the Great Recession in January 2009 (956,791 initial claims, not seasonally adjusted). So they’re still catastrophically bad, but a lot less catastrophically bad than they were a few weeks ago.

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Initial claims under the federal PUA program for contract workers fell to 488,622 (not seasonally adjusted), from 655,999 in the prior week.

Both state and federal initial claims combined: 1.49 million people who newly lost their work and filed for unemployment compensation. This is still a huge influx of newly out-of-work people into the pool of the unemployed. At this rate, this amounts to about 6 million people a month losing their work and filing for unemployment insurance.

What it boils down to.

There is still a huge number of people losing their work every week. But that number is coming down. And there are now more people getting hired back or finding new jobs than are losing jobs, and the overall number of people still on the unemployment rolls has declined. So it appears that the peak of the unemployment crisis is finally behind.

People can only claim unemployment insurance under a state program or under a federal program, but not under both. The claims are processed by the same state unemployment office, and this makes double-dipping less likely.

But data chaos persists. Reports are everywhere of under-reporting and over-reporting, of fraudulent claims and of claims that have been hung up for weeks or even months and still haven’t been processed for one reason or another. There are reports of still understaffed unemployment offices that cannot handle the inflow, especially with the limitations of working in an office environment during the Pandemic, with many workers having been switched to working from home, which entailed a whole set of new problems, including technical issues.

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