Unemployment claims increase as COVID-19 surges
Another 1.2 million people applied for Unemployment Insurance (UI) benefits last week, including 965,000 people who applied for regular state UI and 284,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.2 million who applied for UI last week was an increase of 304,000 from the prior week. The increase was due in part to data volatility during a messy time for UI data—the holidays, the President delaying signing the relief bill until the day after the pandemic programs expired—but the 181,000 rise in seasonally adjusted regular state claims suggests layoffs are increasing as the COVID-19 pandemic surges.
Last week was the 43rd 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 still greater than the worst week of the Great Recession.)
Most states provide just 26 weeks of regular benefits, so many workers are exhausting their regular state UI benefits. In the most recent data, however, continuing claims for regular state UI rose by 199,000, meaning new continuing claims were outpacing exhaustions. After an individual exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 24 weeks of regular state UI (the December COVID-19 relief bill increased the number of weeks of PEUC eligibility by 11, from 13 to 24).
However, in the most recent data available for PEUC, the week ending Dec. 26, PEUC claims dropped by 325,000. That was likely due largely to exhaustions. Well over 2 million people had exhausted the original 13 weeks of PEUC before Congress passed the extensions (see column C43 in form ETA 5159 for PEUC here). These workers are eligible for the additional 11 weeks, but they will need to recertify. We can expect PEUC numbers to swell dramatically as this occurs. It should be noted, however, that in some states, if workers exhaust PEUC, they can get on yet another program, Extended Benefits (EB). In the latest data, the number of workers on EB increased by 375,000, offsetting the drop in PEUC. Workers on EB will stay on EB until they exhaust their EB benefits before switching back to PEUC for the additional 11 weeks of PEUC eligibility.
Continuing claims for PUA dropped dramatically, by 940,000, in the latest data. The latest data for this series is also for the week ending Dec. 26. This was before the relief bill was signed, so that drop was also likely due to temporary exhaustions. The December COVID-19 relief bill extended the total weeks of eligibility for PUA by 11, from 39 to 50 weeks. As workers who exhausted PUA before the extensions were signed get back on PUA, we can expect the PUA numbers to swell.
The 11-week extensions of PEUC and PUA just kick the can down the road—they are not long enough. Congress must provide longer extensions, or millions will exhaust benefits in mid-March, when the virus is likely still surging and job opportunities still scarce.
Figure A shows continuing claims in all programs over time (the latest data are for Dec. 26). Continuing claims are still more than 16 million above where they were a year ago, even with the exhaustions occurring during the time period covered by this chart. The recent sharp declines in PUA in particular are very likely due to temporary exhaustions and will be reversed as people get back on the program.
Continuing unemployment claims in all programs, March 23, 2019–December 26, 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.
There are now 26.8 million workers who are either unemployed, otherwise out of work because of the virus, or have seen a drop in hours and pay because of the pandemic. Further, we started losing jobs again in December; layoffs are rising and the virus is surging. More relief is desperately needed. A key reason more relief is so important is that this crisis is greatly exacerbating racial inequality. Due to the impact of historic and current systemic racism, Black and Latinx workers have seen more job loss in this pandemic, and have less wealth to fall back on. To get the economy back on track in a reasonable timeframe, we need policymakers to pass an additional $2.1 trillion in fiscal support (the $2.1 trillion is calculated by subtracting the $900 billion December COVID-19 relief bill from the total $3 trillion in fiscal support that is actually needed). In particular, it is crucial that Congress provide substantial aid to state and local governments. Without this aid, austerity by state and local governments will result in cuts to essential public services and the loss of millions of jobs in both the public and private sector.
Senate Republicans forced the December bill to be far too small. Fortunately, with their new majority in the Senate, Democrats will now be able to get more relief measures through reconciliation. Top priorities are aid to state and local governments, additional weeks of UI, and increased UI benefits.
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