The weekly unemployment report shows a nation still struggling with the COVID-19 recession. The Department of Labor reports 860,000 new initial claims filed last week.
In the week ending September 19, the advance figure for seasonally adjusted initial claims was 870,000, an increase of 4,000 from the previous week’s revised level. The previous week’s level was revised up by 6,000 from 860,000 to 866,000. The 4-week moving average was 878,250, a decrease of 35,250 from the previous week’s revised average. The previous week’s average was revised up by 1,500 from 912,000 to 913,500.
The advance seasonally adjusted insured unemployment rate was 8.6 percent for the week ending September 12, a decrease of 0.1 percentage point from the previous week’s revised rate. The previous week’s rate was revised up by 0.1 from 8.6 to 8.7 percent.
As the DOL graph shows, after the surge in claims near the beginning of the lockdowns, filings appear to have plateaued.
On Thursday, the Labor Department said the number of people applying for unemployment rose slightly last week to 870,000, a historically high figure that shows the outbreak is still forcing many companies to cut jobs, six months into the crisis that has killed more than 200,000 people in the U.S.
The overall number of people collecting jobless aid in the U.S. fell slightly to 12.6 million. The steady decline in recent weeks indicates some of the unemployed are getting re-hired. Yet it also means others have exhausted their benefits, which last six months in most states.
The AP notes another challenge for unemployed workers and analysts trying to make sense of filings.
Many American workers applying for unemployment benefits after being thrown out of a job by the coronavirus face a new complication: States’ efforts to prevent fraud have delayed or disrupted their payments.
California has said it will stop processing new applications for two weeks as it seeks to reduce backlogs and stop phony claims. Pennsylvania has found that up to 10,000 inmates are improperly collecting aid.
The biggest threat is posed by sophisticated international fraud rings that often use stolen identities to apply for benefits, filling out the forms with a wealth of accurate information that enables their applications to “sail through the system,” said Michele Evermore, an expert on jobless aid at the National Employment Law Project.
The bogus applications have combined with large backlogs and miscounts to make unemployment benefit data, a key economic indicator, a less-reliable measure of the nation’s job market.
As the AP points out, Washington was hard hit by fraud early.
Washington was the first state to be hit as an international fraud ring based in Nigeria managed to steal up to $650 million in benefit payments, though at least half that money has been recovered. Texas, Florida and Oklahoma have also been affected.
How to interpret the numbers? The AP quotes a prominent analyst.
Christopher Thornberg, a founder of Beacon Economics, an economic consulting firm, said all the new programs have taxed most states’ unemployment agencies and made the economic data less reliable.
“It’s kind of the Wild West,” Thornberg said. “I have just largely dismissed this data.”
Yet, it’s the best data available, flawed as it is.