Unemployment Is Much Worse Than It Looks

The unemployment rate fell 2.2 percentage points to 11.1% but claims data and the reference week raise significant questions.

Inquiring minds ponder the discrepancy between the jobs report and the Department of Labor Unemployment Claims.

Jobs Rebound 

Earlier today I commented by Jobs Rebound by 4.8 Million But Huge Headwinds Remain

I question both the strength of the rise in jobs and the decline in the unemployment rate based on claims data and the reference week.

Reference Week 

The household survey week which sets the unemployment rate is the week that contains the 13th of the month. 

Some claims data released today is for the week ending June 13 but first let's discuss the lead chart. 

Continued State Unemployment Claims in 2020 

Continued claims have shown little improvement for five week. On May 16, continued claims were 20.841 million. There were 19.290 for the week ending June 20 and were 19.231 million on June 13.  

These are seasonally-adjusted numbers, and they rose since last week. 

State claims are the best single reference point. Those claims represent people eligible for unemployment at the state level. 

Primary PUA Claims

(Click on image to enlarge)

Primary PUA Claims in 2020 July 1 Report

When Covid-19 hit various unemployment compensation schemes hit at the Federal level, notably PUA.  

People are eligible for PUA based on lost income and forced part-time work. So not everyone on PUA is technically unemployed, but some are.  

The numbers in boxes pertain to the reference weeks for this jobs report and the last one. 

All Continued Claims 

(Click on image to enlarge)

All Continued Claims in 2020 July 1

All Continued Claims include Primary PUA Claims and Emergency PUA Claims plus various Federal programs. 

All Continued Claims and PUA Claims are not seasonally adjusted. 

Total It Up 

It is hard to know how many PUA claims represent people working 0 hours, but the answer is somewhere between 20 million and 30 million. 

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