Initial claims for unemployment insurance under regular state programs were 881,000 in the week ending Aug. 29, down 130,000 from the previous week.
This is only the second time since mid-March that initial claims have been below 1 million. In early 2020, before the pandemic, claims were a bit above 200,000 per week. They then surged to almost 7 million in late March and early April, and then started to fall quickly in mid-April. The pace of improvement has been more uneven since the summer, although claims are trending gradually lower. Initial claims have fallen in 19 of the past 22 weeks.
Without seasonal adjustment there was a small (0.9%) increase in initial claims for the week ending August 29. Non-seasonally adjusted claims have been below 1 million for five straight week, after peaking at above 6 million in early April.
Continuing claims for regular state unemployment insurance programs were 13.254 million in the week ending August 22, down 1.238 million from the previous week. Continuing claims were about 1.7 million in early 2020, then peaked at almost 23 million in mid-May. They have since fallen very gradually.
Without seasonal adjustment continuing claims were down 5.5% in the week ending August 22.
Under all programs, including the Pandemic Unemployment Assistance program, 29.2 million people were receiving UI benefits in the week ending August 15. This was up 2.2 million from the previous week. In the same period in 2019, there were a total of 1.6 million people receiving unemployment insurance benefits. These numbers are not seasonally adjusted, given the lack of history for the PUA program.
Due to the coronavirus pandemic, the Department of Labor made a change in the way that UI claims are seasonally adjusted starting with this release. Thus, the level of claims in previous weeks may not match up with earlier releases.
Although the update to the seasonal adjustment methodology muddies the waters a bit, unemployment remains extremely elevated at the end of the summer. Initial claims for unemployment insurance, while trending down, remain about four times higher than they were a year ago. More than 20 million people are receiving some form of UI, eighteen times greater than before the pandemic.
There was some thought that bonus unemployment insurance payments of $600 per week were causing some of the unemployed to put off looking for a job; according to a study from the University of Chicago, in May about two-thirds of those receiving benefits were getting more from UI than they made while they were working. But there has been no big shift in behavior since these bonus payments expired at the end of July, although the Trump administration has worked with states to jury-rig a partial and temporary alternative.
PNC expects job growth of 1.5 million when the Bureau of Labor Statistics releases the government employment report at 8:30 Friday morning. PNC expects the unemployment rate to decline to 9.8% in August, down from 10.2% in July and a peak of 14.7% in April.