Rise in weekly initial unemployment claims in Washington reflect increase in fraudulent filings.

Although the Employment Security Department reports another increase in regular initial unemployment claims, the numbers are distorted by fraudulent filings. ESD writes (emphasis ours):

During the the week of May 9 – May 15, there were 19,619 initial regular unemployment claims (up 18.2 percent from the prior week) and 469,098 total claims for all unemployment benefit categories (up 7.6 percent from the prior week) filed by Washingtonians, according to the Employment Security Department (ESD).  

  • Initial regular claims applications are now 86 percent below weekly new claims applications during the same period last year during the pandemic.
  • The 4-week moving average for initial claims remain elevated at 14,590 (as compared to the 4-week moving average of initial claims pre-pandemic of 6,071 initial claims) and remains at similar levels of initial claims filed during the Great Recession.
  • Initial and continued claims for regular benefits increased over the week while initial claim applications for Pandemic Emergency Unemployment Compensation (PEUC) and Pandemic Unemployment Assistance (PUA) decreased over the week.
  • Increases in layoffs in Health Care and Social Assistance, Educational Services, and Retail Trade contributed to the increase in regular initial claims last week.
  • We have also seen a recent increase in fraudulent claim applications, which is contributing to the increase in initial claims. Our controls to identify these fraudulent claims are working. These claims will show up in the weekly claims numbers even though they are not paid.

Seattle Times business reporter Paul Roberts writes,

ESD officials acknowledged this week that spikes in weekly jobless claims in May were similar to surges last year that paralyzed unemployment systems in Washington and other states as criminals used stolen Social Security numbers and other personal data to file fake claims for billions of dollars in pandemic benefits.

But this second wave of fraud is smaller than what struck last year, ESD officials said. And so far, the ESD’s updated security flagged most of the suspicious claims before any funds went out, agency officials said. 

“Our fraud controls are working,” Cami Feek, ESD’s acting commissioner, said in an interview this week. “We’re catching [the bogus claims] and not paying them out.”

More in Roberts’s story. And, yes, this means the numbers tell us nothing new about the state economy.