02 Apr Weekly Unemployment Reaches Record Highs
by Mark Schniepp and Ben Wright
April 2, 2020
The deterioration of the labor market has been much deeper than expected, and the effective unemployment rate is now 14.8 percent nationwide.
There were 6.6 million filings for initial unemployment claims last week, shattering any previous record by an almost inconceivable amount.
A cumulative 10 million workers have filed for unemployment insurance benefits over the last two weeks. Claims are rising because of heavy layoffs, and because self-employed workers and independent contractors are now eligible to collect benefits.
Consequently, we estimate that there are probably more than 20 million people who are effectively unemployed.
It’s important to note what we mean by an effective unemployment rate. We’re not tracking the official unemployment rate that will be released by the BLS because the official unemployment rate will miss (1) people who still have a job but have had their hours cut, (2) people who have been laid off and are unable to search for a new job until the quarantines end, and (3) workers who have been furloughed without pay.
In this unprecedented environment, there are a lot of workers who fall into these categories, and our weekly estimates are designed to capture them.
Normally, the BLS unemployment rate is a highly accurate labor market indicator, but our unemployment tracker will be far more informative during the Coronavirus recession because everyone, including unemployed workers, must stay at home, which prevents or seriously interferes with searching for an interim job.
There has been a plunge in hiring anyway, except at Amazon, Walmart, Target, the grocery stores, Dominos, UPS, the postal service, and healthcare enterprises. Approximately 40 percent of companies indicated that they were hiring in late February. That number has now declined to 6 percent. Consequently, finding work today will be an onerous task.
Since March 14, over one million Californians have filed for unemployment benefits. The effective unemployment rate in California has risen to 16.0 percent, the highest on record, with more than 3 million residents effectively unemployed. This number will be going higher next week.
Please stay tuned to this page for real-time updates on the COVID-19 economy.