Unemployment Claims Hit New Record: 32.9 Million State & Federal. Week 16 of U.S. Labor Market Collapse

Yves here. The bizarre veneer that things are still kinda-sorta normal despite the labor market imposing and widespread non/underpayment of residential and commercial real estate obligations is beyond me. Admittedly, hitting the pause on evictions and propping up businesses (and employment) with PPP loans, CARES Act stipends, and topped-up unemployment is helping maintain spending in the economy. But the PPP job-maintenance requirements are rolling off for the early borrowers. How much more jobs bleed will we see from that alone? And that’s before you get to the panic about rising Covid-19 rates in many states.

By Wolf Richter, editor of Wolf Street. Originally published at Wolf Street

The data chaos persists, and the unemployment numbers keep getting worse. The torrent of newly unemployed keeps flowing week after week. But a lot of people are also going back to work. The total number of people who continued to claim unemployment compensation in the week ended July 4 under all state and federal unemployment insurance programs, including gig workers, jumped by 1.41 million people, to 32.92 million (not seasonally adjusted), the Department of Labor reported this morning. It was the highest and most gut-wrenching level ever.

The number of people who continue to receive state unemployment insurance (blue columns) has been ticking down, as more people got their jobs back than newly unemployed flooded the state unemployment systems. But the number of people claiming federal unemployment insurance, including gig workers under the Pandemic Unemployment Assistance (PUA) program, continues to surge (red columns), which causes the total number of people claiming unemployment benefits under all programs to rise:

Unemployment Insurance Under State Programs

The number of people who were newly laid off and filed their initial unemployment claims with state unemployment offices in the week ended July 4 ticked down to 1.4 million (not seasonally adjusted). This is still a huge number of people filing new unemployment claims – and nearly twice the peak of the unemployment crisis in 2009 – but it’s the lowest number since this crisis erupted.

Those declines in initial claims have been painfully slow over the past four weeks. Over those four weeks combined, 5.75 million newly-laid-off people filed initial unemployment claims. The chart represents the weekly inflow of newly unemployed under state programs into the masses of the unemployed:

But millions of people who had been on state unemployment insurance got their jobs back, and this includes some workers at retail stores, restaurants, bars, hotels, but also in construction and other activities.

This outflow of people coming off the state unemployment rolls has been higher than the weekly inflow, and as a result, those continuing to receive unemployment insurance, the “insured unemployed,” under state programs fell to 16.8 million. Though still a gigantic number, it was the lowest since mid-April (blue columns in the first chart above).

Unemployment Insurance Under Federal Programs

Pandemic Unemployment Assistance (PUA), which covers gig workers: 1.04 million initial claims were processed by 49 states in the week ending July 4. This represents the weekly inflow into the mass of gig workers claiming benefits under this program.

One state – New Hampshire – has still not figured out how to process these federal PUA claims and continues to stiff its gig workers. But this is a big improvement over last week, when three states still hadn’t processed any PUA claims. Georgia and West Virginia finally started processing claims this week. Florida started processing PUA claims last week.

The mass of gig workers that continue to claim benefits under the PUA program jumped by 1.5 million from a week earlier, to 14.36 million. This is a huge number and shows just how hard gig workers have been hit and how important they are in the labor market. These gig workers include everyone from Uber drivers to coders working on a contract basis, who ran out of work.

Gig workers claiming continued benefits under PUA now account for 44% of all people on state and federal unemployment rolls. At this rate of progression, in a few weeks, they may be over half of all continued unemployment claims.

Pandemic Emergency Unemployment Compensation (PEUC), for those who have exhausted all rights to regular state and federal unemployment insurance: The number of people who continue to claim benefits rose to 850,461. But 11 states still have not yet processed any claims under the PEUC program, including Florida.

Other federal unemployment programs: Continued claims by federal employees remained roughly stable at 14,482; and continued claims by newly discharged veterans rose to 13,107.

These unemployed under all federal programs combined, and under some other programs, are shown by the red columns in the first chart above.

Data Chaos Persists

No government agency, neither at the state nor at the federal level, was ready for this type of unemployment crisis when it suddenly erupted in mid-March. The result has been chaos in processing unemployment claims and then in paying people their unemployment benefits.

There have been countless claims for months that unemployment offices around the country were having trouble even processing initial unemployment claims under state programs.

And the claims by gig workers under the federal PUA program were complex to implement at the state level, and states dragged their feet implementing them. As states are catching up with processing the claims, the numbers keep rising. We don’t know whether the surge in gig workers claiming benefits under the PUA program is from more gig workers losing work, or from states catching up with the claims, or from a mix of both.

And actually paying claims has fallen way behind too. This is happening around the country to varying degrees. For example, according to government data cited by the Mercury News yesterday, by the end of May, California had started paying benefits to 3.13 million unemployed but still hadn’t paid 1.88 million unemployed, though it had processed their claims. The state may have caught up some by now.

There has been chaos everywhere. States are still behind processing claims. Some claims that have been processed were fraudulent, according to reports. There may be duplication and other issues. And data chaos has made the separate monthly jobs report by a different agency, the Bureau of Labor Statistics, a useless mess. But one thing we know: This unemployment crisis is dragging out. And there is no V-shaped recovery at the moment.

At stake are a dozen major clothing brands, thousands of stores, and many thousands of employees, after years of struggling, while work-from-home is annihilating casual and formal office attire. Read… Pandemic

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37 comments

  1. JBird4049

    Aside from my usual agreement with the fecklessness of our leadership, I think that our leaders in Congress are spending so much effort finding ways to enrich their friends and reasons not giving enough money to people that the economy will just collapse. It will cost far more to restore it than it would have to just adequately fund everything for a full four month quarantine.

    Wolf and other writers keep explaining the what and how, but nobody seems to be tell me why it is being done. Some say greed. Others say callousness or just stupidity. If the whole economy crashes, just how is having some electrons stored in a bank going to help you buy what doesn’t exist anymore?

    I have to wonder if there will be any stores to buy stuff like clothes. I don’t mind jeans and a t-shirt, but a decently fitting blazer with slacks is nice, which means going to a store, trying clothing on, and having it altered. Just where do I go? It seems like the entire Brick-and-Mortar stores are all going to disappear.

    Reply
    1. fresno dan

      JBird4049
      July 10, 2020 at 5:52 am

      BTW, your not buying your blazer and slacks at Brooks Brothers, or JC Penny….hope you know your measurements good enough to order those items over the innertubes…
      For me, I’ve gotten much fatter in the last few months, so innertube ordering is going to be fraught – on the other hand, I don’t have any place to go…

      Reply
      1. Altandmain

        Nobody outside of the top 10% can really afford that much clothing from Brooks Brothers.

        That’s probably why they are in trouble. Not to mention, Brooks Brothers doesn’t seem to have adapted with the times. They didn’t really offer anything like high quality casual clothing (think jeans that cost hundreds of dollars) that might appeal to say, techies or something like that to adapt to the changing times.

        Perhaps the decline of even the upper middle class has hurt their interests. We are fast heading to an oligarchy.

        Reply
        1. JBird4049

          You’re right. As the ability to be to afford good clothing declines, the jobs that might use them go away and especially for women the marketing of “fashionable,” cheap, throwaway clothing, and finally the disappearance of actual department, or even just clothing, stores makes trying to have quality fashionable clothing very hard to do.

          There was a social movement advocating dressing well for both men and women. It started to die in the 60s. Then courses like home ec which taught such things were removed. Finally the clothing being sold started a long, slow process of crapification. If you wear jeans, think about how long jeans last compared to thirty years ago.

          So, just were can I go to get middle of the road clothing that I can see, try on, and maybe have tailored?

          Reply
    2. Larry

      The end goal is a banana republic. Abject poverty for almost everybody and an elite upper crust that gets to live life to the fullest. Think Brazil.

      Reply
      1. cocomaan

        I don’t think that answers JBird4049’s question though: why?

        If it’s true that the elite want this to be a banana republic, why would they want that? Banana republics are unstable, uneven, prone to military coups, civil unrest in the streets, violence, uncertainty, etc.

        I prefer to think that everyone is invested in short term gain and protecting their interests today, thus resulting in the banana republic in the longer term. A banana republic is good for no one.

        Reply
        1. Glen

          They just want all the money they can take. Currently they are angling to get all those fat 401Ks, and they also want to get their hands on your Social Security. And all the free money from the Fed they can print.

          They don’t really think too far beyond that. It’s just simple greed enacted by billionaires able to buy the government and make the laws.

          They don’t care if they wreck America, or kill Americans because they don’t even think about it. They will not think about it until somebody shows up to haul the off to jail, or drags them out of their house and hangs them on a lamp post. Until then – keep looting.

          Reply
      2. Billy

        And with immigration, legal and otherwise, the promotion of high density housing, a cancel culture denying anything having to do with American progress, thus promoting the failures in our society over the achievers, the excusing and promotion of violence and intellectual rigor approaching the Chinese Cultural Revolution, the demographics will also begin to resemble Brazil.

        Reply
      3. Henriux Miller

        Replying to Larry / 8:01 am:

        Agree, 100 percent. Americans have been very slow in figuring out that (thanks to a fully bipartisan agreement) their country is being turned into one of the best examples of stark inequality in the world, something like a Brazil with nuclear weapons and plenty of aircraft carriers. (At least, from my first-hand experience, it’s not too difficult in Brazil to buy good quality “Made in Brazil” goods of all kinds. I have the impression that their traditional manufacturing base has not been as damaged by globalization as that of the heavily de-industrialized America). The recent photo of a US couple pointing their weapons at protesters walking in a gated community is one big step closer to the reality of Brazil’s middle class, who must live behind barbed wire, electrical fencing, guards armed with long weapons, etc.

        Reply
      4. Trick Shroadé

        This implies that “they” have some master plan. There is no master plan. Everyone’s just trying to continue doing what they normally do as best they can. For the rich folks in the halls of power that just happens to be redistributing more wealth upwards to themselves.

        Reply
    3. polecat

      Get yourself some hose, linen undershorts, a felted doublet (preferably with ‘points’ – to hold up those hose) ..to fend off the elements, a leather belt (to hold up your unders …) , a pair of leather pointed, buckled shoes (sorta like bunnies slippers) and finally – a dagger (for eating/defence). Only then can you call yourself good to go! … “it’s the fields for you, you shlub!”

      Also – Get a set of finer hose .. for those few moments when bending the knee in the presence of the neo ‘Royal Court’ is warrented.
      Extra credits if you’ve acquired a full set of plate!

      Reply
    4. Sancho Panza

      Thank you, Jbird! Yes, yes, yes. We’ve all seen the data. We need a lot more discussion of why. What is going on? Good theories explain the past and have predictive power too. Without going deep, I can only think of truly dark motives that would explain the why. Population control and population reduction. Mind you I am normally a very positive person but I am hard pressed to answer your question without offering something in this kind of direction. Please prove or suggest or persuade me differently. I beg anyone.

      Reply
    5. Kfish

      Because the people doing this have been completely insulated from any consequences for screwing others, and under late-stage capitalism, the most ruthless rise to the top. Greed is a universal human quality kept in check by social disapproval and fear of consequences; remove those two, reward sociopathy and this is exactly what you get.

      Reply
  2. fresno dan

    At one point, this would have been the 24/7 news story. It seems “its the economy stupid” is not from last century but last millennia. It is astonishing to me how little (really, ANY) attention unemployment gets on TV “news.” A few decades ago, all sorts of “man in the street” interviews about the hardship of unemployment would be wall to wall on TV. Seems only covid and Trump get any airtime now a days…
    And of course, it is just too complex for any of the zillions of pundits on TV to ever wonder how all these unemployed people pay for their covid testing or heaven forbid, treatment.
    Just incredible how unemployment is not reported.

    Reply
  3. The Rev Kev

    Maybe the whole problem is how the economy is organized so that any disruption involves increasing unemployment. When I was a kid I watched a lot of TV and watching American series, was surprised how often characters would have a job, be laid off, go back to work there and then get laid off again. Even at that young age I was thinking WTF? Now it looks like people have been laid off by the tens of millions.

    The problem seems to be that the American economy appears to be organized with no slack in the system and in the following 5:58 video, Mark Blyth talks about this point of America was a six-liter GT Mustang – without airbags. Well, except those for at the very front that is. Fascinating to watch-

    https://www.youtube.com/watch?v=3rgANzx8hXs

    Reply
    1. Jack

      Thanks for the video link Rev Kev. I love Mark Blyth. I don’t see the kind of reset he is advocating occurring until disaster strikes and their is full out rioting in the streets. Yesterday, Yves posted an article about Warren’s eviction bill and I really enjoyed reading the comments there. Same with this article. They point toward the same conclusion, that is, that our society (a large part of it anyway) is just incapable of of analyzing the facts of a situation and adjusting to reality. Americans are so caught up in their culture myths. Basically there are two types of people, those who want to know all the facts and want to make an informed decision, and those who resist any attempt to alter their worldview, sticking their fingers in their ears and shouting “LaLaLaLaLa” if you keep trying to convince them. Unfortunately, there are way too many of the latter in the US.

      Reply
      1. RBHoughton

        That’s why NC is a refuge of sanity. May be we should be asking for a more formal debating-style forum on the site wherein the issues can be reduced to the facts and the remedies revealed. – the sort of thing the civil service used to do.

        Reply
    2. Susan the other

      Thanks Rev. MB’s description of the difference between Denmark and the US as Denmark has an open society and the US does not was interesting. There’s open and then there’s open. What we closed off beginning in the 80s was employment. I’m thinking it wasn’t a question of “are we open?” but “are we profitable?” Instead of creating a balanced economy, we destroyed our own society by destroying labor. And then we “opened” up our big ports and bought everything from China with credit cards to keep the economy afloat. So if I were describing the difference between Denmark and the US, I’d say we are a feudal society, by and for the “open” international rich. The open-society-resilillience MB is referring to is an egalitarian trading society – one that has a balanced economy, one that is able to close off the predators, and complete with social safety nets. We’ve got no such thing. The big question is, are we gonna learn anything from this. From the incompetence of our distribution techniques and the quality of the narrative so far, I’d say No. I wish we could outsource for good government. I’d love to see an apology from Congress.

      Reply
  4. William Hunter Duncan

    I am a self-employed builder/remodeler. I filed for unemployment in mid April, in Minnesota. Their response was, no benefit, you have not been employed since 2013. Right; because I have been self-employed, paying taxes. I filed an appeal. Nothing. Minnesota is supposed to be one of the more organized states, with less unemployment than the average. If there are more like me I’m assuming unemployment is higher than they are saying.

    I get the sense that those in leadership in this country are just assuming it will all work itself out by the end of the summer. I’m wondering what a contested election looks like with 40 million unemployed or marginally employed Americans, staring down a winter without job prospects?

    Reply
    1. Andrew

      I am in Michigan and also a self -employed builder/remodeler, Michigan came through for me and my fellow self employed tradesmen. Did the state outright deny your appeal or have you just not heard back from them? If it is the latter case I would keep up the pursuit as maybe the state is still digging out of the deluge. You have payed your taxes you should be able to collect.

      Reply
      1. William Hunter Duncan

        I recieved a letter within a week after I applied, saying my unemployment payments would be $0.00. There was some paperwork to fill out, more info about being self-employed. I filled that out and sent it in 2 months ago and have heard nothing. I did some more research and filled out an application to appeal the decision outright and sent that a month ago. Still no word. I checked online after I read this and there is no change in my unemployment account, and no way to reapply or change any of the information. Last I checked it was a minimum two hour wait to talk to someone. I have never recieved any email.

        Reply
        1. Louis Fyne

          keep trying, PUA should cover yoursituation. But its implementation by states have been all over the place…..California still has 1+ million unpaid PUA claims.

          gotta stay on hold for hours (at least that’s what the local paper said of our state)….internet (reddit)? local legal aid? state legislator’s office? local library?

          good luck.

          Reply
        2. Andrew

          I believe every state unemployment system is different but the benefit is federal ; in Michigan the minimum benefit is around 120$ weekly which we as sole propriator contractors were never elegible for; under the federal covid relief protocols we are, and the program adds 600$ to the benefit. That is almost a six to one match which should induce the state to get you assistance. In Michigan there is a subsection to handle income reporting which if you thought your weekly benefit should exceed 720$ you could report it as such, but if the benefit was satisfactory you could opt out of the paperwork. Keep at it, winter can be a tough time; Im in the Upper Penninsula.

          Reply
  5. Procopius

    I have some cognitive dissonance over the unemployment reports. The BLS (which is part of the Department of Labor, isn’t it?) said there are something like 13.2 million unemployed people, based on their family survey. The Department of Labor puts out these weekly reports that say there’s 32.9 million. I tend to believe the latter, but wish we didn’t have these huge contradictions and discrepancies. Even the U-6 doesn’t come close to the DoL numbers.

    Reply
    1. edmondo

      The unemployment picture will change soon enough. After his father gets elected, at least Hunter Biden will be able to get a job.

      Reply
    2. Otto

      The problem is Biden or his AI masters do not know what the upper & lower bounds of what they can do or not do. And how is one to know? Since the Revolutionary War this country has been a people’s country. The problem is that in the last 40 years, the people were lied to over and over again. And to that magical thing, and a philosophy that anything goes and nothing matters. Our fellow citizens are beyond annoyed, at everything , and those in any level of government or business, truly had better be prepared for real actual change. We are in a Long Emergency ҉, but we quickly could end up in Long Goodbye ⽍ ◌. The first offers hope the second is an extinction event.

      Reply
      1. Glen

        +100

        The more I learn about the reality of CV, the more I realize two basic things:

        1) CV is like AIDS, we do not have an AIDS vaccine after YEARS of work on one, and we will most likely NEVER GET a CV vaccine.
        2) People that get sick from CV and end up in the hospital never really recover. They get good enough to get discharged, but they are going to be crippled with LIFE LONG disabilities. Even people that get sick and never go to the hospital will have health issues that crop up later in life, and not necessarily in the lungs, it attacks other organs in ways we don’t fully understand yet.

        So, as our favorite IDIOT puts it, “here’s the deal”:

        We are in the Long Emergency, but we are severely mishandling the CV crisis in the US, and we could easily make CV endemic i.e. it NEVER GOES AWAY in the US.
        We have NEVER ramped up the manufacture of reagents required for testing in the US, we are still reliant on China.
        We have never ramped up the manufacture of PPE in the US, we are still reliant on China.
        We are not moving towards Medicare For All or in any of the most necessary ways revamping our failing heath care system to effectively handle CV. We are hanging in with the super expensive death care system (suck out all their money as they die).
        We have slashed public health care, and government heath care R&D (which is the vast majority of our R&D) and are not ramping it up.
        We are electing a President (maybe, I will not vote for him) that is going to “return to normal” not apparently realizing that 1) that is the normal that created Trump, and 2) that normal is long gone with a world wide pandemic and a New Great Depression. He is, to put it bluntly THE WORST POSSIBLE ALTERNATIVE we could pick. But there it is, we’re going to go BACK to those POLICES that “family bloged”ed us in the first place because surely more WRECKING of America will fix everything.

        Reply
  6. Scott1

    Before Covid the States did not necessarily have to be all that United. Evidence of that shows up as states whose statues, hence heroes, were primarily to military figures of the Confederate States of America. These are the states a Yankee doesn’t want to visit or even drive through if they can avoid it. States have finite Treasury power whereas the US Treasury has infinite Treasury Power.

    It follows in the current crisis that will be long lived that the States have been discovering and will be convinced that there is significant advantage to being United. State governments and US citizens as individuals need to be supported with dollars only the Federal Government is currently creating, legally. Clearly our choices are better described as dystopian or dystopian since one dares not to imagine anything that might be misconstrued as utopian. Really dystopian or less of a dystopia are the options.

    Many people need to be paid for the job of staying home and taking care of the kids. For the nation to stay stronger they have been given that complex a job. The Federal Government is equipped with institutions that can make that happen. It is a practical matter. Individuals either have a job staying home or when willing and able must be given a job, and even the tools necessary to do that job. The Federal Jobs Guarantee AND the UBI paid for being obedient, are required responses.

    Life is hard, and we can share only the dystopia and less of the dystopia.
    Prior to the attack of the Covid I read that of the 350 million people in the United States, 154 million were working. Subtracting 33 million from 154 million leaves 121 million.

    Reply
  7. JWP

    What makes this number more astonishing it the lack of available jobs for unemployed. If BLS is adjusting their numbers as companies eliminate positions altogether, the unemployment rate would be a bad measure for the true impact of the virus. Unemployed+positions eliminated would provide a better picture. A personal testament are the sweeping of majority of my friends looking for work who cannot find any open jobs and resort to Postmates or other gig “jobs” to pay rent. Macroeconomic stats have always been misleading and a poor attempt to simplify the complex. Now more than ever, Wolf points this out and shows us all we are working in the dark with the true economic impacts.

    Reply
  8. Jeremy Grimm

    The unemployment numbers are soft and fudgy in their measures of the actual levels of unemployment — and have been for a long time. Before Corona the low unemployment numbers were designed to hide the numbers of unemployed, and doubtless after Corona they still are. I believe that besides their staggering difference in magnitude, there is a crucial difference in the unemployment numbers after Corona. Sectors of the economy existent before Corona are collapsing and might never return. At the start of the Corona pandemic Big Money pushed through its CARES Act priming the economy to foster the growth of economic predators with long track records of destroying enterprises and the jobs they provided. The jobs lost will not be coming back any time soon — if ever — and I can think of nothing to inspire faith ‘new’ jobs will soon be created from the ruins of this economic destruction to replace what is lost.

    The near-term unemployment numbers are reason for great concern. But I believe the long-term unemployment numbers, combined with the long-term — apparently premeditated — destruction of enterprise and employment and economic consolidations which the future promises are reason for far greater concern.

    Reply
    1. JBird4049

      The economic data that has been published by the federal government has been slightly distorted each year since the early 80s until the cumulative effect is a very large undercount of unemployment and inflation. I think that Shadowstats.com has some good explanation of the what, why, and how.

      Reply

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