PUA Plunge

After falling back below 800 thousand last week, initial jobless claims have taken a pause before coming in at 787 thousand for the week ending January 1. That was unchanged from the previous week’s original reading, though that number was revised up to 790 thousand this week.

While claims changed little and remained off the low of 711 thousand from early November, this week’s 3 thousand decline was better than the forecasted uptick back up to 800 thousand.

It is a bit less positive of a picture for unadjusted claims. After three weeks of declines, claims rose by 77.4 thousand this week up to 922.1 thousand. While at least part of that increase was a result of seasonality, that was the highest reading since the week of December 11, when claims came in at 941.9 thousand.

Although regular state claims on an unadjusted basis were higher, total claims with the inclusion of the Pandemic Unemployment Assistance (PUA) program saw an improvement. Total claims between the two programs fell to 1.084 million from 1.155 million last week. That decline was driven by a big drop of about 48% WoW in PUA claims, which came in at a new low of just 161.46 thousand.

The 149 thousand decline in PUA claims was the largest since the first week of August, when claims under this program dropped 166.36 thousand. While that may sound like a positive, as detailed below, it should be taken with a grain of salt.

While that large drop in PUA claims is possible, there were irregularities on a state-by-state basis, meaning the big drop was more likely due to a combination of the timing of when the recent spending bill was signed and the holidays.

For instance, some states like Ohio, Florida, and Indiana reported zero PUA claims in the most recent week despite counts in the tens of thousands the prior week. Other states like Illinois and Kentucky may not have reported zero claims, but they reported single to double-digit numbers despite counts that were materially higher in the prior week.

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