Research
Modest Drop in Continuing Claims Dampens Optimism for Swift Recovery
Daniel Zhao
Chief Economist at Glassdoor | Jun 25, 2020
Continuing claims for unemployment insurance (UI) fell slightly to 19.5 million last week. The modest decline points to a frustratingly slow labor market recovery. Continuing claims fell by 767,000 to 19.5 million from 20.3 million on a seasonally adjusted basis, according to the latest figures from the Department of Labor for the week ending June 13, 2020. Other economic indicators raised hopes of a V-shaped recovery, but that optimism is dampened by the staggering number of Americans still claiming unemployment benefits and the plodding pace of the labor market recovery.
Initial claims for unemployment insurance (UI) for the week ending June 20, 2020 dropped to 1.48 million, seasonally adjusted, from 1.54 million. On a non seasonally adjusted basis, however, initial claims were flat at 1.46 million. Factoring in an additional 728,000 claims for the Pandemic Unemployment Assistance (PUA) program, brings initial claims last week up to a total of 2.2 million. Notably, PUA now accounts for about a third of weekly initial and continuing claims.
In the coming weeks, more attention should be paid to the non-seasonally adjusted data. Unemployment claims normally rise in late June and early July, leading the seasonal adjustment procedure to push the seasonally adjusted data downward. If the labor market recovery stalls in the next few weeks, any stagnation or backsliding in the labor market could be masked by the seasonal adjustment. Conversely, in late July, the reverse will be true where the seasonal adjustment will likely understate the pace of economic recovery.
Today's report includes continuing claim data for the week containing June 12, covering the reference week for the June jobs report due out next Thursday. Continuing claims fell 940,000 since the week including May 12, suggesting that the June jobs report will show a modest recovery in the labor market. However, continuing claims in May had shown an increase in unemployed Americans in contrast to the 2.5 million additional jobs reported by the May jobs report. All-in-all, the June report is likely to show a modest improvement in a labor market still balanced precariously between a speedy V-shaped recovery and a much slower recovery.
To speak with Daniel Zhao about today’s report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @danielbzhao on Twitter and subscribe to Glassdoor Economic Research.
Initial claims for unemployment insurance (UI) for the week ending June 20, 2020 dropped to 1.48 million, seasonally adjusted, from 1.54 million. On a non seasonally adjusted basis, however, initial claims were flat at 1.46 million. Factoring in an additional 728,000 claims for the Pandemic Unemployment Assistance (PUA) program, brings initial claims last week up to a total of 2.2 million. Notably, PUA now accounts for about a third of weekly initial and continuing claims.
In the coming weeks, more attention should be paid to the non-seasonally adjusted data. Unemployment claims normally rise in late June and early July, leading the seasonal adjustment procedure to push the seasonally adjusted data downward. If the labor market recovery stalls in the next few weeks, any stagnation or backsliding in the labor market could be masked by the seasonal adjustment. Conversely, in late July, the reverse will be true where the seasonal adjustment will likely understate the pace of economic recovery.
Today's report includes continuing claim data for the week containing June 12, covering the reference week for the June jobs report due out next Thursday. Continuing claims fell 940,000 since the week including May 12, suggesting that the June jobs report will show a modest recovery in the labor market. However, continuing claims in May had shown an increase in unemployed Americans in contrast to the 2.5 million additional jobs reported by the May jobs report. All-in-all, the June report is likely to show a modest improvement in a labor market still balanced precariously between a speedy V-shaped recovery and a much slower recovery.
To speak with Daniel Zhao about today’s report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @danielbzhao on Twitter and subscribe to Glassdoor Economic Research.Daniel Zhao
Daniel Zhao is Chief Economist at Glassdoor. On Glassdoor's Economic Research team, he has conducted research using Glassdoor's unique data on a variety of topics affecting job seekers and employers ranging from the health of the job market to pay transparency to employee engagement & retention. His work has been cited in publications like the New York Times, the Harvard Business Review and more. Prior to joining the Economic Research team, he also worked on improving the user experience for Glassdoor’s consumer jobs product and mobile app. He holds a bachelor's degree in applied mathematics and economics from Harvard College.
Tags:BenefitsUnemployment
