26/9/20: America's Scariest Charts: Continued Unemployment Claims

 

Updating my charts for the continued unemployment claims:

The latest data is covering the period through September 12, 2020.

• On a non-seasonally-adjusted basis, there were 13,355,586 Americans with continued unemployment claims in the week of September 12, 2020, an increase of 212,869 on the week prior, but 9,438,559 down on the COVID19 peak reached in the week of May 9, 2020. At the lowest point in pre-COVID expansion period, weekly continued claims stood at 1,350,834. 
• In the last 4 weeks through September 12, 2020, average decline in continued unemployment claims was 461,476. At this rate of decline, it will take the U.S. economy 26-27 weeks to recover its pre-COVID19 lows in terms of continued unemployment.
• Current level of continued unemployment claims implies 9.14% unemployment rate.

Per charts above - covering seasonally-adjusted data that has been subject significant methodological revisions starting with September 2020:

• It would take thee U.S. economy 33 weeks from September 12, 2020 to complete full recovery to pre-COVID19 levels of continued unemployment claims
• In seasonally-adjusted terms, unlike in terms of raw data discussed above, September 12, 2020 continued unemployment claims stood at 12,580,000 down 167,000 on week prior. 

I will be covering new or initial unemployment claims in the net post, so stay tuned. 

23/8/20: America's Scariest Charts: Continued Unemployment Claims

 

Having updated non-farm employment data (https://trueeconomics.blogspot.com/2020/08/23820-americas-scariest-charts.html), let's take a look at continued unemployment claims, as reported through the first week of August.

A chart to start with:

Continued unemployment claims are still falling.

• The weekly rate of declines is improving. Most current week on week decline is 636,000, an improvement on prior week/week decline of 610,000. $ weeks average weekly rate of decline is 326,750. 
• Latest continued unemployment claims are at 14,844,000 which is down from the COVID19 peak of 24,912,000 set in the week of May 9, 2020. 
• We have registered reductions in continued claims in 11 out of the 13 weeks since the peak claims.

Here is the chart comparing historical records of recovery in continued claims to the current crisis perid:

And the same on the log scale

Comparing current continued claims to pre-recession period claims:

• Current levels of claims are 8,687,000 higher than pre-recession period high, 13,195,000 above the pre-recession trough and 13,142,000 above the claims registered in the last  month before the onset of the recession.

The key takeaways from this are: 

1. What matters from now on is not so much the level of the recession peak, but the rate or the speed of the recovery toward pre-recession 'normal'. So far, the rate of recovery has been fast. If sustained, we might be able to avoid much of the damage that arises from long-term unemployment duration. 
2. The rate of benefits expirations will also matter a lot. We are looking at eligibility for unemployment dropping with weeks ahead, and the supplemental payment to unemployment insurance also falling off. As the two effect bite, the impact on the overall economy from reduced unemployment support schemes can be pronounced, triggering renewed recessionary risk. 

Stay tuned for the analysis of the first time unemployment claims figures next.