Initial claims for unemployment insurance were flat in the week ending September 5 after seasonal adjustment, at 884,000. Claims for the previous week were revised slightly higher. Before seasonal adjustment, initial claims rose 2.4 percent from the previous week to 857,000.
Continuing claims, the number of people receiving regular state unemployment insurance benefits, rose by 93,000 to 13.292 million in the week ending August 29 after seasonal adjustment. Before seasonal adjustment, continuing claims were up 0.4 percent to 13.197 million.
Total continuing claims, under all programs including Pandemic Unemployment Assistance, were 29.605 million in the week ending August 22, up from 29.225 million in the previous week. These numbers are not seasonally adjusted.
The Labor Department changed its seasonal adjustment process for unemployment insurance claims in September, so looking at the seasonally adjusted data may not be giving an accurate read on the labor market. But the non-seasonally adjusted date tell a clear story. At the beginning of 2020 initial claims were around 200,000 per week, near the lowest levels in decades. But then as the pandemic hit, states imposed restrictions on economic activity and businesses shuttered, initial claims soared to above 6 million in early April, by far the highest levels ever. Claims then started to decline, swiftly at first, and then more gradually since the summer. Claims have flattened out between 800,000 and 900,000 per week in August and into September, and are about 5 times higher than they were at this time last year. Although layoffs have slowed since the worst of the pandemic, they remain extremely high as some businesses that tried to reopen have closed again, and others are reducing their workforces because of reduced long-term demand in the face of the ongoing pandemic.
Continuing claims tell a similar story. Including special pandemic programs put in place in the spring, almost 30 million people were receiving some form of unemployment insurance benefits in August. This compares to 1.6 million people at the same time in 2019, so the number of UI beneficiaries is 18 times higher than it was a year ago. The job market is improving, but unemployment remains extremely elevated. Total continuing claims have flattened out in August, indicating that fewer and fewer of the unemployed are returning to work. This suggest that more and more temporary layoffs are becoming permanent and that job growth is weakening.
Between May and August the U.S. economy regained almost one-half of the more than 22 million jobs lost between February and April because of the pandemic. But data on unemployment insurance claims indicate that job growth will be slower through the rest of 2020 and that full recovery in the labor market will take years.
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