Large rise new claims for unemployment for week ending 1/9/21.

The number of new claims for unemployment for week ending 1/9/21 increased to 965,000, a deterioration of 181,000 from the prior week.  That is the highest number of new state claims since 8/22/20.

Since 8/29/20, the new weekly claims have been in the 700Ks or 800Ks.

Keep in mind that before the shutdown of the economy the new claims averaged about 220K per week, so we are now running more than four times the previous norm.

The number of continuing claims for unemployment has been slowly dropping but increased for the week ending 1/2/21.

News report

Article at Wall Street Journal on 1/14/21 reports US Unemployment Claims Rise as Pandemic Weighs on Economy. Article link indicates the consensus is the increasing virus count combined with increasing restrictions on businesses caused the jump in new unemployment claims.

Article says there are other economic indicators suggesting the economy is slowing down again. Stats such as small business optimism, new home sales, existing home sales, household income, and household spending point towards a slowdown.

Following graphs show the devastation from the economic shutdown.

New claims

New claims for unemployment by week since the start of 2020:

 

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 slowly 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 since start of 2020:

 

A closer look at the continuing claims at the state level only since 8/1/20:

 

Continuing claims in state and federal programs

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

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. The number of total covered unemployed is dropping only slowly. Previously in this section I listed the change in federal coverage (PEUC). This data is now the change in federal and state coverage. Here is a recap of the change in three week increments:

  • (0.57M) – 10/3/20, 2 week change
  • (1.98M) – 10/24/20, 3 week change
  • (0.52M) – 11/14/20, 3 week change
  • (0.21M) – 12/5/20, 3 week change
  • (0.74M) – 12/26/20, 3 week change

For context, in the six weeks ending 4/25/20, there was an increase in state unemployment of 20.6M.

Graph of state coverage and extended federal coverage, which shows this slow decline:

 

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.

 

 

For a closer look, check out the insured unemployment rate since the start of September 2020:

 

 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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