Unemployment claims hit highest level in months: Millions more jobs will be lost if Congress doesn’t act
Another 1.3 million people applied for UI benefits last week, including 853,000 people who applied for regular state UI and 428,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.3 million who applied for UI last week was an increase of 276,000 from the prior week, bringing initial claims back to their highest point since September. Further, last week’s increase was not just due to week-to-week volatility in the data. The four-week moving average of total initial claims is now at its highest point since October. In other words, layoffs appear to be rising, consistent with the resurgent virus. And, last week was the 38th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were greater than the second-worst week of the Great Recession.)
Most states provide 26 weeks (six months) of regular benefits, but this crisis has gone on for nearly nine months. That means many workers have exhausted their regular state UI benefits. In the most recent data, the four-week moving average of continuing claims for regular state UI dropped by 260,000 (note: the weekly number increased, but that was likely due to week-to-week volatility in the data).
For now, after an individual exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 13 weeks of regular state UI. However, PEUC is set to expire on December 26 (as is PUA—more on these expirations below).
In the latest data available for PEUC (the week ending November 21), PEUC ticked down by 36,000. How did this happen, with so many people exhausting regular state UI and needing to get on PEUC? Many of the roughly 2 million workers who were on UI before the recession began, or who are in states with less than the standard 26 weeks of regular state benefits, are now exhausting PEUC benefits, at the same time others are taking it up. More than 1.5 million workers had exhausted PEUC by the end of October, and that figure will be substantially higher now (see column C43 in form ETA 5159 for PEUC here).
In some states, if workers exhaust PEUC, they can get on yet another program, Extended Benefits (EB). However, in the latest data, just 615,000 workers were on EB. That’s far less than half of those who have exhausted PEUC. Most are left with nothing.
Figure A shows continuing claims in all programs over time (the latest data are for November 21). Continuing claims are still more than 17 million above where they were a year ago, even with the exhaustions we’ve seen so far.
Continuing unemployment claims in all programs, March 23, 2019–November 21, 2020: *Use caution interpreting trends over time because of reporting issues (see below)*
|Date||Regular state UI||PEUC||PUA||Other programs (mostly EB and STC)|
Click here for notes.
Click here for notes.
Data are not seasonally adjusted. A full list of programs can be found in the bottom panel of the table on page 4 at this link: https://www.dol.gov/ui/data.pdf.
Senate Republicans allowed the across-the-board $600 increase in weekly UI benefits to expire at the end of July, so last week was the 19th week of unemployment in this pandemic for which recipients did not get the extra $600. And, as mentioned above, PUA and PEUC will expire on December 26—unless Congress acts. Millions of workers are now depending on these programs. The Department of Labor (DOL) reports that a total of 13.1 million workers were on PUA (8.6 million) or PEUC (4.5 million) during the week ending November 21. When these programs expire, millions of these workers and their families will be financially devastated. A paper from The Century Foundation finds that 12 million workers will lose PUA or PEUC benefits when they expire on December 26—on top of the 4.4 million who will have exhausted them before then. It also finds that only 2.9 million will then be eligible for Extended Benefits. That means a total of 13.5 million workers (12.0 million + 4.4 million – 2.9 million) will have lost CARES Act unemployment benefits by the end of the year with nothing to fill in the gap.
The House of Representatives passed a $3 trillion relief package in May, then a $2.2 trillion relief package in October, and House Speaker Nancy Pelosi and Senate minority leader Chuck Schumer have said they back a $900 billion bipartisan bill as a basis for negotiations. Senate Republicans must act.
It’s important to remember that UI is great stimulus. Reinstating and extending pandemic UI provisions would create or save more than five million jobs. November jobs data were released last Friday, showing that there were 26.1 million workers who were unemployed or otherwise out of work because of the virus, or who have seen a drop in hours and pay because of the pandemic. And job growth has slowed dramatically. Stimulus is desperately needed.
Blocking stimulus is also exacerbating racial inequality. Due to the impact of historic and current systemic racism, Black and Latinx communities have seen more job loss in this recession and have less wealth to fall back on. The lack of stimulus hits these workers the hardest. Further, workers in this pandemic aren’t just losing their jobs—millions of workers and their family members have lost employer-provided health insurance due to losing their jobs in the COVID-19 downturn. To get the economy back on track in a reasonable timeframe, policymakers must pass roughly $3 trillion in fiscal support, with the first $2 trillion hitting the economy between now and mid-2022 and, to avoid a fiscal cliff that causes unemployment to drift back up after that, another $1 trillion over the following couple of years.
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