California Emerged from its “Reset.”
By Wolf Richter for WOLF STREET.
California’s Employment Development Department – whacked by reports of chaos and massive backlogs in processing and paying unemployment claims, and by waves of fraudulent claims, particularly under the federal Pandemic Unemployment Assistance (PUA) for the self-employed – announced on September 19 that it had “paused” processing claims for a “reset” period during which it would fix the issues and catch up with its backlog.
This pause halted California’s reporting of unemployment claims to the Department of Labor; and in the following weeks, the DOL then just copied and pasted California’s last reported data into its weekly unemployment claims report. California accounts for about a quarter of US unemployment claims.
At the time, the DOL, in explaining its decision of copying-and-pasting old data every week until California catches up, also said: “Upon completion of the pause and the post-pause processing, the state will submit revised reports to reflect claims in the week during which they were filed.” And those “revised reports” showed up today, and the prior data has been revised. A glorious feast of data chaos.
California’s initial unemployment claims fell by 17k from the prior week to 158.9k people who’d newly filed for UI under the regular state program in the week ended October 17.
California’s continued claims fell by 145k to 1.87 million. Since the day the “reset” began four weeks ago, and adjusted with the new insights gained during the “reset,” continued claims have dropped by one-third (from 2.8 million). The huge spike in early May was more California data chaos:
Newly-laid off workers: state UI initial claims remain high.
Across the US, initial claims for UI under state programs fell by 73k to 757k (not seasonally adjusted) in the week ended October 17, not quite undoing the jump last week of 98k, and remaining higher than week before last week. The number of initial claims has been in the same range for the 11th week in row:
Initial state claims and initial PUA claims. Initial PUA claims ticked up a smidgen in the week ended October 17, to 345k. When added to the initial state UI claims of 757k, the combined total amounted to 1.1 million in the week ended October 17. Meaning 1.1 million people who’d lost their work filed for UI in one week, and this number hasn’t changed much over the past eight weeks, and it’s still a huge number.
Continued claims, state and federal.
Total continued claims for unemployment insurance (UI) under all state and federal programs fell by 1.05 million, to 23.15 million people (not seasonally adjusted), the lowest since early May, according to the Department of Labor this morning. These 23.15 million continued claims of UI – marred by data chaos of backlogs, over-reporting, under-reporting, and fraud allegations surrounding the PUA claims – would constitute 14.4% of the civilian labor force of 160.8 million.
These total continued UI claims under all programs are reflected in the chart below: The huge jump in total UI claims in late August and early September, that then suddenly unwound, was caused by a huge jump in California’s continued PUA claims (part of the red columns) that California then unwound two week later by an even huger drop. It has been data chaos all along:
Blue columns: Continued Claims under state programs.
The number of people who continued claiming UI under state programs fell by 1.02 million to 8.0 million, the lowest since late March.
Red columns: Continued Claims, federal & other key programs.
The number of people who have claimed UI since at least Oct. 3, under all federal programs established by the CARES Act and some other programs ticked down by 28k to 15.2 million (not seasonally adjusted):
- Federal PUA claims dropped by 426k to 10.2 million.
- Federal PEUC jumped by 510k to 3.3 million, having nearly tripled in five weeks. The Pandemic Emergency Unemployment Compensation program, established under the CARES Act, covers workers not covered by other programs.
- State Extended Benefits jumped by 90k to 445k, having doubled in five weeks.
- State STC / Workshare ticked down by 1k to 195253k.
Federal PUA & PEUC continued claims combined.
These are the two programs established under the CARES Act: PUA to provide UI to gig workers for the first time in history, and PEUC to cover workers who are not eligible under other programs, or lost coverage under other programs. The combined total reported today rose to 13.5 million, the highest in three weeks. Beyond the California PUA surge-and-plunge in late August and early September, has essentially been flat for the past five weeks, as continued PUA claims (black columns) have declined, but continued PEUC claims have risen:
And Florida provides more data chaos.
Florida finally figured out how to process and report initial PUA claims on a weekly basis a few weeks ago. And those claims have been surging. Today Florida reported 49,641 initial PUA claims, the most of any state, and nearly double California’s initial PUA claims (25,168). But Florida is still not reporting “continued PUA claims,” the only state failing to do so. Their absence likely understates total US continued PUA claims and adds to the data chaos.
The picture that emerges.
The UI claims data indicates that the labor market is churning wildly through people, with over a million people on UI getting hired every week, while over a million people are still losing their work every week and filing for UI. But slightly more people on UI are finding work again than people are losing their work and filing for UI. This massive churn shows the extent of the turmoil in the economy as companies try to deal with all the shifts and changes, where some companies hire hand-over-fist while other companies are shedding workers.
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