Research
UI Claims Indicators Diverge at Critical Point in Recovery
Daniel Zhao
Chief Economist at Glassdoor | Jul 16, 2020
Key unemployment insurance (UI) claim indicators diverged last week, with the seasonally adjusted data falling, but the non-seasonally adjusted claims increasing for the first time in months. The rising unemployment claims add to the evidence that the recovery may be stalling and come at a critical juncture in the crisis as COVID-19 cases rise around the country and expanded unemployment benefits for Americans are set to expire.
Initial claims for the week ending July 11, 2020 dropped to 1.3 million, seasonally adjusted, from 1.31 million, according to the latest figures from the Department of Labor. However, non-seasonally adjusted initial claims increased for the first time in 14 weeks, rising over 100,000 to 1.5 million. The seasonal adjustment during this time of the year artificially overstates the rate of recovery; however, that effect should ebb in the coming weeks.
Pandemic Unemployment Assistance (PUA) initial claims dropped to 928,488, non-seasonally adjusted. PUA and UI claims combined fell for the first time in 4 weeks as the increase in traditional UI claims was not enough to overwhelm the larger decline in PUA claims, but crucially, the decrease in PUA claims may simply be due to the decline in states reporting on PUA with data from Florida and Arizona missing from this week's report.
Continuing claims for unemployment insurance (UI) fell modestly to 17.3 million last week, for the week ending July 4, 2020. Note that, however, continuing claims on a non-seasonally adjusted basis surged by over 800,000, increasing to 17.3 million.
While UI claims were a useful real-time indicator when the crisis began, interpreting the universe of UI claims data including PUA is growing increasingly difficult. Even though the June jobs report showed a recovering labor market, total continuing claims across all programs, including PUA, have risen since then. And if the rise in continuing claims persists through this week's data, the July jobs report—to be released August 8—may actually show employment declining.
The increase in non-seasonally adjusted claims adds another layer of uncertainty. The increasing risk of a surprise drop in employment in July is bolstered by other economic indicators which are starting to show a faltering recovery in the labor market. For example, Glassdoor data is showing that job openings have declined 5.5 percent from June 22 to July 6 in a sign that hiring is losing steam and potentially starving the recovery of fuel.
The end of July is a perfect storm when the $600 in weekly additional UI benefits is set to expire, withdrawing enormous financial support from millions of Americans at a time when early indicators are showing a faltering recovery, but crucially, before official statistics from the Bureau of Labor Statistics can weigh in. Reading the tea leaves in high-frequency economic indicators over the next few weeks will be critically important to understanding the trajectory of the economy.
To speak with Daniel Zhao about today’s report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @danielbzhao on Twitter and subscribe to Glassdoor Economic Research.
Pandemic Unemployment Assistance (PUA) initial claims dropped to 928,488, non-seasonally adjusted. PUA and UI claims combined fell for the first time in 4 weeks as the increase in traditional UI claims was not enough to overwhelm the larger decline in PUA claims, but crucially, the decrease in PUA claims may simply be due to the decline in states reporting on PUA with data from Florida and Arizona missing from this week's report.
Continuing claims for unemployment insurance (UI) fell modestly to 17.3 million last week, for the week ending July 4, 2020. Note that, however, continuing claims on a non-seasonally adjusted basis surged by over 800,000, increasing to 17.3 million.
While UI claims were a useful real-time indicator when the crisis began, interpreting the universe of UI claims data including PUA is growing increasingly difficult. Even though the June jobs report showed a recovering labor market, total continuing claims across all programs, including PUA, have risen since then. And if the rise in continuing claims persists through this week's data, the July jobs report—to be released August 8—may actually show employment declining.
The increase in non-seasonally adjusted claims adds another layer of uncertainty. The increasing risk of a surprise drop in employment in July is bolstered by other economic indicators which are starting to show a faltering recovery in the labor market. For example, Glassdoor data is showing that job openings have declined 5.5 percent from June 22 to July 6 in a sign that hiring is losing steam and potentially starving the recovery of fuel.
The end of July is a perfect storm when the $600 in weekly additional UI benefits is set to expire, withdrawing enormous financial support from millions of Americans at a time when early indicators are showing a faltering recovery, but crucially, before official statistics from the Bureau of Labor Statistics can weigh in. Reading the tea leaves in high-frequency economic indicators over the next few weeks will be critically important to understanding the trajectory of the economy.
To speak with Daniel Zhao about today’s report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @danielbzhao on Twitter and subscribe to Glassdoor Economic Research.Daniel Zhao
Daniel Zhao is Chief Economist at Glassdoor. On Glassdoor's Economic Research team, he has conducted research using Glassdoor's unique data on a variety of topics affecting job seekers and employers ranging from the health of the job market to pay transparency to employee engagement & retention. His work has been cited in publications like the New York Times, the Harvard Business Review and more. Prior to joining the Economic Research team, he also worked on improving the user experience for Glassdoor’s consumer jobs product and mobile app. He holds a bachelor's degree in applied mathematics and economics from Harvard College.
Tags:Unemployment
