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Thursday, April 30, 2020

Unemployment Mystery

The figures for new unemployment claims last week came in at 3.6 million.  That's down substantially from last week, but it's not something to cheer about.  These are only people filing for the first time.  Continuing claims are much higher.  Still, it is not clear what these figures represent.

Let me use an example of five people.  Tom was furloughed from his job in a restaurant on March 10 as the virus hit hard.  He filed for unemployment the next day and started getting benefits.  His claim was counted the next week.  Mary was furloughed from her job in another restaurant on March 15.  She tried to file her unemployment claim, but the system was backed up and she couldn't actually file with the state until April 5.  She started getting benefits on April 22.  When was she counted?  Most likely for the April 5 filing, but we can't be certain.  Marcel was unable to works as a massage therapist beginning in mid March when his state shut down such services.  He was self employed.  Prior to the virus crisis, he could not have gotten unemployment compensation.  Congress changed that so that gig workers can now collect.  The estimates are that over two million such workers are now collecting benefits in this category.  In some states, though, the unemployment systems could not accept the filings until as late as last week.  If Marcel couldn't file until then but has been unemployed for six weeks, was he just counted this past week?  Is there any tally kept of how many gig workers are now included on the list?  Rose also was furloughed in mid-March.  She was called back to work though when her employer got a loan through the paycheck protection plan.  Rose decided, however, that she would rather collect unemployment than go back to work.  Where does she fit into these numbers?

The best way to describe the weekly figure for new claims is as a rough estimate.  There are too many variables to pay too close attention to them. 

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