Thursday, May 28, 2020

Initial and continuing jobless claims: good “less worse” news

 - by New Deal democrat

Weekly initial and continuing jobless claims give us the best snapshot of the continuing  economic impacts of the coronavirus to the average worker.

Ten weeks in, there is some significant “less bad” news.

First, here are initial jobless claims both seasonally adjusted (blue) and non- seasonally adjusted (red). The non-seasonally adjusted number is of added importance since seasonal adjustments should not have more than a trivial effect on the huge real numbers:  

There were 1.915 million new claims, which after the seasonal adjustment became 2.123 million. This is a -323,000 decline from last week’s number, and the lowest so far since the virus struck. 

Since those laid off due to the initial lockdowns presumably have already applied for  benefits, and we are three weeks after some States “reopened,” these new claims  primarily represent the spreading second-order impacts of the coronavirus shutdowns. 

The bad news is that new economic damage has continued to spread. The “good” news, as mentioned above, is that the spread - while huge - is diminishing.

The “less bad” trend also showed up in continuing claims, which lag one week behind. Both the non-seasonally adjusted number (red), and the less important seasonally adjusted number (blue) fell, by 3.6 million and 3.9 million respectively:

This tells us that, as of two weeks ago, there were enough callbacks to more than offset the new damage.

Climbing back from recession bottoms always has to start with “less awful” news, and this is what we got in this week’s jobless claims report. At the same time, as I wrote the other day, the jury is still very much out on whether new lockdowns or other restrictions will have to resume in States that declared a Virus Jubilee and recklessly reopened too soon.