Jobless numbers may not tell the full story
More than 40 million people — the equivalent of 1 out of every 4 American workers — have filed for unemployment benefits since the coronavirus pandemic grabbed hold in mid-March, the government reported Thursday, an astounding tally that rivals the bleakest years of the Great Depression.
The latest additions — the 2.1 million people who filed state unemployment claims last week — may not be only a result of fresh layoffs, but also evidence that states are working their way through some of the choking backlog.
“We’re still catching up,” Diane Swonk, chief economist at the accounting firm Grant Thornton, said of the newest claims. “The lags have been long.”
The Labor Department report marks the eighth week in a row that new jobless claims, on a seasonally adjusted basis, dipped from the peak of almost 6.9 million — but the level is still far above any other historical highs.
At the same time, overcounting in some places and undercounting in others makes it difficult to precisely measure the number of layoffs caused by the pandemic — and in devising a policy response.
“When we think about what to do when benefits expire, it would be helpful to know how many people are actually getting them,” said Elizabeth Pancotti, a research assistant at the National Bureau of Economic Research. While the Labor Department reports may be the best source of information, she said, they offer an “incomplete picture.”
Shelter-in-place orders and business restrictions have been lifting across the country, and there is evidence in the report that some workers are being called back: The number of people receiving state jobless benefits dropped by roughly 3.8 million to 21.1 million for the week ended May 16.
But as Swonk noted, “it’s not enough to offset the extraordinary economic devastation and job losses associated with COVID-19.”
And while rehiring certainly accounts for a chunk of that decline, workers who had exhausted their weekly state benefits would also be reflected.
Reopenings remain bumpy and incomplete, and flare-ups of the coronavirus continue to disrupt business. On Tuesday, Ford Motor temporarily halted production at the Kansas City assembly plant in Missouri to deep clean after an employee tested positive for the virus. Two other Ford plants — in Chicago and Dearborn, Mich. — were also temporarily closed.
In Thursday’s report, the department offered two sets of figures. One includes the more than 40 million people who have applied for state benefits and is seasonally adjusted. The other includes those who applied under the new federal emergency program called Pandemic Unemployment Assistance and is not seasonally adjusted. So far, more than 10 million have applied.
Pandemic Unemployment Assistance, part of an expanded palette of jobless benefits passed by Congress two months ago, is meant to help freelancers, gig workers, the self-employed and others who would not normally qualify under state rules.
But several economists suspect that there is a lot of double counting and warn against simply adding figures from the two programs together.
Some states, flooded with applicants, were slow to put the pandemic program into effect. Initially, many people were mistakenly told they were ineligible. Others were instructed to apply for state benefits first and be rejected before applying for the federal benefits.