Unemployment Claims During COVID-19

According to a recent MReport, there are more than 30 million Americans claiming unemployment benefits. The U.S. Department of Labor reported that an additional 2.12 million Americans filed for unemployment this week. This is a slight decline from the week before, when 2.44 million claimed unemployment. Doug Duncan, Chief Economist at Fannie Mae, stated that while the decline in claims is encouraging, 14% of the workforce is unemployed. Additionally, Duncan stated, “Continued claims represent the cumulative number of persons claiming unemployment insurance benefits at a point in time and is therefore better, though still imperfect, measure of the total extent of jobless present in the economy. As of May 9th, states reported processing 8 million continued claims for benefits available from emergency compensation programs enacted as part of the CARES Act”. Duncan stated that those 8 million are not included in the claims number because they are people who are normally ineligible for unemployment insurance. Expanded programs help cover those who have exhausted their regular benefits.

The Department of Labor said that during the first week of May unemployment was at 17.1%. The following week it had declined to 14.5%. This time last year, roughly 1.56 million Americans filed claims. The state of Washington leads the nation with highest insured unemployment rate of 31%. Nevada, Florida, Hawaii, Michigan, California, New York, Rhode Island, Vermont, Connecticut, and Georgia all had unemployment rates above 18%. Duncan explained that unemployment insurance eligibility rules have been relaxed due to the COVID-19 outbreak, therefore there has been an increase in those eligible to apply. This makes it difficult to truly estimate the uninsured unemployment share of the workforce. In addition, because of the large amount of people applying, states are behind on processing applications. This may indicate that this weeks release from The Department of Labor might not be accurate. Black Knight revealed that roughly 3.6 million homeowners were past due on their mortgages at the end of April. This is the highest number since January of 2015. Unfortunately, the number of employment for homebuilding and remodeling was also at its lowest level since November 2015.

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