May 21, 2020

As Economies Reopen, Insured Unemployment Rate Falls in 32 States

Dave Shideler and Jonas Crews

This week’s report revealed that nearly 2.44 million initial claims for unemployment insurance were filed the week ending May 16, 2020. An additional 2.23 million initial claims were filed for Pandemic Unemployment Assistance, which covers self-employed, contract and part-time workers. Thirty-two states saw their insured unemployment rates drop.





Heartland Forward is tracking three key metrics on a weekly basis to understand how the current crisis is impacting the economies across different states: initial unemployment insurance claims, unemployment insurance cumulative claims, and the insured unemployment rate. This week’s report revealed that nearly 2.44 million initial claims for unemployment insurance were filed the week ending May 16, 2020. An additional 2.23 million initial claims were filed for Pandemic Unemployment Assistance, which covers self-employed, contract and part-time workers. Thirty-two states saw their insured unemployment rates drop. Additional findings, including interactive charts and maps, are below.

UI Initial Claims



Observations:

  • Nationally, 2.44 million persons applied for UI for the week ended May 16, 2020; this likely includes many claims filed in previous weeks but could not be processed due to antiquated systems incapable of handling the volume of applications over the last two months.

  • These states had the highest number of initial claims (with more than 100,000 claims) for the week ending May 16, 2020: California (246,115), New York (226,521), Florida (223,927), Georgia (179,548), Washington (145,228), and Texas (134,381).

  • The following states had more claims last week than the previous week: Washington (34,397), California (33,448), and New York (27,102). These additional states had increases less than 1,000 claims: Florida, Arizona, Indiana, Tennessee, Alaska, North Dakota, Delaware, Illinois, and Mississippi.

  • These states realized the greatest decline in initial claims between last week and the week before: Maine (-91.9 percent), Wyoming (-42.0 percent), New Jersey (-40.7 percent), Oklahoma (-38.9 percent), and Rhode Island (-38.3 percent).

  • Of the Heartland1 states, Texas, Illinois, Michigan, Kentucky, and Ohio had the highest levels of initial claims; Indiana, Tennessee, North Dakota, Illinois, and Mississippi saw small increases in initial claims, while Kentucky realized the greatest decline in claims, followed by Oklahoma, Louisiana, Wisconsin and Texas.

  • UI Cumulative Claims



    Observations:

  • States with the largest shares of their workforce seeking UI benefits have large manufacturing, retail trade, and accommodations and food service (largely driven by tourism activities) industries.

  • Georgia now leads the U.S. with the highest share of its workforce applying for UI benefits at 40.6 percent.

  • 20 states have larger shares of their workforce applying for UI benefits than the U.S. (22.4 percent).

  • 9 states in the Heartland have larger shares of their workforce applying for UI benefits than the region (20.5 percent).

  • Insured Unemployment Rate



    Observations:

  • With all states now beginning to reopen their economies, 32 states saw their insured unemployment rate (IUR) fall, though the change in rates was modest for the most part (ranging from 0.15 to 2.9 percentage points). Florida and Washington saw their IUR increase by more than 10 percentage points, followed by Oregon (8.8 percent), Hawaii (5.7 percent) and California (4.2 percent).

  • The states with more than 1 in 5 participants in the workforce on UI are: Washington (32.3 percent), Nevada (26.5 percent), Oregon (25.0 percent), Florida (24.8 percent), Hawaii (23.5 percent), Michigan (22.1 percent), California (20.7 percent) and New York (20.0 percent).

  • The five states with the lowest IUR are: Utah (5.8 percent), South Dakota (6.0 percent), Nebraska (6.4 percent), Wyoming (7 percent) and Arizona (7.7 percent).

  • More On Key Terms And Our Methodology

    Unemployment Insurance And Initial Unemployment Insurance Claims
    Unemployment insurance (UI) is a state administered program that provides a fraction of an individual’s prior wages when they are separated from an employer for reasons beyond the individual’s control. The fraction of wages paid, as well as the length of time an individual can receive benefits, vary by state, however, the Coronavirus Aid, Relief and Economic Security (CARES) Act provided expanded eligibility and enhanced benefits across all 50 states.2

    Weekly unemployment insurance claims data3 provides the most up-to-date data on employment trends that is available. Economists watch these data as indicators of the economy’s health, as movements in unemployment insurance foreshadow periods of economic contraction or expansion.

    Unemployment Insurance Cumulative Claims
    Initial claims are filed when an individual is separated from his/her employer. Administratively, it is a request for benefit eligibility determination. That is, no benefits are issued based upon this claim; rather, an individual is deemed eligible to receive benefits, and the level of those benefits is determined by this claim. Initial claims are considered a leading indicator of economic activity, as initial claims rapidly rise when the economy is contracting and many people are furloughed and/or laid off.

    The map allows you to observe how the levels of UI initial claims by state and week since March 7, 2020. Shades of red reflect rising claims, while shades of green reflect declining claims. If you hover over a given state, you will be given the level claims for the current data, as well as the level and percent change over the previous week.

    To put the initial claims data into perspective, we calculate the share of February 2020 private employment that have filed initial claims to date. This measure compares the sum of weekly initial claims since March 7, 2020, to “pre-COVID-19” pandemic employment levels (total private employment for February 2020). Intuitively, this calculation represents the share of a state’s workforce requesting UI benefits.

    The bars in the chart are arranged alphabetically, because you can compare week to week changes by adjusting the slider above the chart. Hovering over a particular bar will reveal the share of pre-outbreak employment that has filed for UI, as well as the level of initial claims since March 7, 2020 and the level of employment in February 2020.

    Insured Unemployment Rate
    The insured unemployment rate (IUR) is the ratio of the number of continuing claims in a given week divided by the number of employees covered by UI during that quarter. Continuing claims are filed to receive benefits for a week of unemployment, so these represent individuals receiving UI benefits. Covered employees is a proxy for the local workforce, as it represents all employees (working and unemployed) that are eligible to receive UI benefits. Data for the IUR represents benefits received for the week before last, or May 9, 2020.

    The IUR is proxy for economic activity. An increasing trend indicates economic contraction, since more individuals are receiving UI benefits from week to week. A decreasing trend indicates economic expansion, indicating that people are finding jobs (or returning to their previous jobs) and no longer needing UI benefits.

    The user can customize the chart by selecting any or all of the states, including aggregate values for the Heartland and U.S. Hovering over a state’s line will provide the continuing claims, covered employment and IUR corresponding to the week and region nearest the cursor.

    Endnotes

    1. The Heartland region consists of these states: Alabama, Arkansas, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, Texas and Wisconsin.

    2. Eligibility was expanded to cover individuals who are quarantined, caring for a family member with COVID-19, or who are voluntarily quarantining arising from health concerns. Additionally, independent contractors and sole proprietors are eligible for unemployment insurance benefits under the Pandemic Unemployment Assistance. Enhanced benefits included a $600 per week supplement to state’s regular payments through July 31, 2020, and an extension of every state’s benefits duration by 13 weeks.

    3. Unemployment insurance claims is reported weekly, 8:30 am Eastern Time on Thursdays, by the U.S. Department of Labor, Employment and Training Administration here: https://www.dol.gov/ui/data.pdf. Historical data is available for download here: https://oui.doleta.gov/unemploy/claims.asp.