Small decline in new claims and continuing claims for unemployment for week ending 12/26/20.

The number of new claims for unemployment for week ending 12/26/20 declined for a secone weeks in a row. New claims are 787K, a 19K drop for the week.

This two week drop follows two weeks of increases, which totaled 176K.

Since 8/9/20, the new weekly claims have been in the 700Ks or 800Ks.

For contrast, remember that before the government induced shutdown of the economy the new claims averaged about 220K per week so we are still running three or four times the previous norm.

The number of continuing claims for unemployment is continuing to drop. Large part of the drop is people going back to work. Some portion, likely a lot, of the drop in state-level continuing claims has been offset by rising number of people on the federal program.

When a person exhausts the state level coverage, they become eligible for the extended federal benefits, called the Pandemic Emergency Unemployment Compensation program.

Article at Wall Street Journal on 12/31/20 reports US Unemployment Claims Fell Modestly Last Week.  Article explains the new claims for state programs is a proxy for layoffs. Good observation.

The holidays can create “noise” in the statistics. Uncertainty about the new so-called stimulus package in Congress creates uncertainty for business, employees, and the unemployed. All that means the data is a bit fuzzier for the couple of weeks surrounding Christmas and New Year’s.

The number of new unemployed has been hovering in the 700,000s and 800,000s for several months. That suggests to me that the economy is stalling, or at least the recovery is rather weak.

Following graphs show the devastation from the economic shutdown.

New claims

New claims for unemployment by week since the start of the year:

With the scale of layoffs this year, do you notice the first part of the line that seems to be near zero? That was the normal amount of new claims before the shutdown.

Top of this post shows a graph looking closer at the new claims since 9/5//20.

Continuing claims

The number of people covered by unemployment insurance who are drawing checks is extremely high, but is continuing to drop, even if slowly. This is labeled as the number of insured unemployed. People going into the extended benefits program at the federal level offset a large portion of the drop.

Continuing claims for the year:


Here is a closer look at the continuing claims at the state level only since 8/1/20:


Continuing claims in state and federal programs

This is where I get confused. Adding in the federal claims shows the recovery in the economy is not very strong.

Tally of people who are now in the extended 13 weeks covered at the federal level is offsetting a portion of the drop in state-level. Here is a recap

  • 1.96M – 9/19/20
  • 2.79M – 10/3/20 – 0.83M increase in two weeks
  • 4.14M  – 10/24/20 – 1.36M increase in three weeks
  • 4.57M – 11/14/20 – 0.43M increase in three weeks
  • 4.79M – 12/5/20 – 0.22M increase in three weeks
  • 12/12/20 – the one week decline at the federal program is 0.20M, only second drop since late September

Graph of state coverage and extended federal coverage:


Insured unemployment rate

The proportion of people who are covered by unemployment insurance who are unemployed is also included in the weekly report. As you can see the insured unemployment rate is continuing to drop.


 Data source

Weekly press release from the Department of labor: Unemployment insurance weekly claims. At the end of the report you can find weekly data for this year.

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