Heartland Forward is tracking two key metrics on a weekly basis to understand how the current crisis is impacting the economies across different states: insured unemployment rate and initial unemployment insurance (UI) claims. Initial unemployment claims rose significantly last week, as nearly 80,000 more people applied for unemployment insurance benefits than in the prior week. As additional federal stimulus grows less likely and COVID cases rise throughout the Midwest, employment growth has seemingly stalled jeopardizing the economic recovery.
Insured Unemployment Rate (IUR)
• IUR for the Heartland1, the non-Heartland region and the United States saw IUR decrease for the week ending September 26. Forty-five states had declining IUR, while 5 states had increasing IUR. Decreasing trends are consistent with the reopening of economies across the country.
• Only 3 states had more than 1 in 10 participants in the workforce on UI: California (16.1 percent), Hawaii (15.0 percent) and Nevada (10.6 percent).
• The five states with the lowest IUR are: Idaho (1.0 percent), Alabama (1.2 percent), South Dakota (1.3 percent), Utah (1.4 percent) and Nebraska (1.6 percent).
UI Initial Claims
• Nationally, 898,000 persons (seasonally adjusted)2 or 885,885 persons (not seasonally adjusted) applied for UI for the week ended October 10, 2020.
• The national unemployment insurance claims numbers from the previous week both increased. The seasonally adjusted value rose by 6.3 percent (after revision of the seasonally adjusted claims), but unadjusted claims increased by 9.5 percent.
• The total number of people claiming unemployment throughout the U.S. for the week ending September 26, 2020 was 25,290,325, a decrease of 250,000 from the previous week.
• South Dakota is the only state that didn’t apply for and received authorization under the FEMA Lost Wages Supplemental Payment Assistance, which provides at least $300 per week supplement to state unemployment benefits. While benefits will be paid retroactively to August 1, 2020, payments are being made in most states, though several have already exhausted their allotted funds.
• These states had the highest number of initial claims for the week ending October 10, 2020: California (226,179)3, New York (68,670), Georgia (53,400), Illinois (46,072) and Florida (44,795).
• Thirty-four states had more claims last week than the previous week. The 5 states with the largest increase in claims last week are: Indiana (18,788), Illinois (9,805), Massachusetts (9,582), Georgia (8,526) and Washington (6,083).
• These states realized the greatest decline in initial claims between last week and the week before: Michigan (27.1 percent decline), Montana (21.6 percent decline), Mississippi (20.7 percent decline), Vermont (16.7 percent decline) and Alabama (16.3 percent decline).
• Of the Heartland states, Illinois, Texas, Indiana, Ohio, and Kansas had the highest levels of initial claims. Eleven Heartland states saw initial claims rise: Indiana, Illinois, Wisconsin, Texas, Kansas, Missouri, Ohio, Iowa, North Dakota, Kentucky and Tennessee; Michigan realized the greatest decline in claims, followed by Mississippi, Alabama, Oklahoma and South Dakota.
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.4 These enhanced benefits officially ended on July 31, 2020, though the last benefit payment was made for the week that ended on July 25, 2020.
Weekly unemployment insurance claims data5 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.
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.
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 October 3, 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.
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.
Seasonal adjustment is a technique used to remove labor market changes that correspond to changes in seasons, providing consistent data for comparison throughout the year. For example, one can anticipate a rise in summer employment as amusement parks or tourism venues increase employment between Memorial Day and Labor Day to accommodate the demand associated with the summer vacation travel season. This increase happens annually, so it would be inappropriate to interpret it as an increase in employment without accounting for the seasonality.
California reported estimated data based upon the previous week’s claims numbers; this estimate has not changed in three weeks.
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.
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.