There is little hope to be found in the slowing rate of increase
On Thursday, the U.S. Department of Labor released its most recent tally of weekly unemployment insurance claims, finding that an additional 2.1 million Americans filed for unemployment insurance between May 17 and 23. Over the past 10 weeks, almost 41 million insurance claims have been filed.
The number of new weekly unemployment insurance claims has fallen steadily for the past eight weeks, after peaking at almost seven million claims during the week of March 28. The 2.1 million new claims marked the smallest weekly increase since March 21, when the coronavirus began its disruption of the U.S. economy.
The number of continued claims, the cumulative number of people claiming UI benefits at a single point in time, also fell. After hitting an all-time high a week prior, this figure declined to 21 million for the week of May 16.
“While it is encouraging to see continued claims fall for the first time since the current crisis began, this number still represents close to 14 percent of the workforce,” says Fannie Mae chief economist Doug Duncan.
The figures are indeed difficult to get excited about, particularly since they may not be telling the full story of unemployment in America. Duncan says that because some states have reported backlogs of unemployment insurance applications because of capacity constraints “this week’s release may understate the true extent of insured layoffs.”
Additionally, the New York Times reported that millions of jobless Americans are not included in the Department’s weekly report, including laid-off workers who have not applied for benefits and eight million undocumented workers who have also lost their jobs.
Neel Kaskari, president of the Minneapolis Federal Reserve, told CNN on Thursday that he feels the worst is yet to come.
“I think the real, or effective, unemployment rate is probably around 25 percent,” he said, adding that real unemployment in the U.S. may reach as high as 30 percent.
Some sectors of the economy, and regions of the country, are going to feel the full wrath of a slow COVID-19 recovery. Washington (31.2 percent), Nevada (26.7 percent), Florida (25 percent) and Hawaii (23.4 percent) are currently the states with the highest insured unemployment rates. But other states haven’t been so unfortunate.
Jeremy Boillot, originator for Barrett Financial Group, operates out of Gilbert, Arizona, in the southeast of the Phoenix sprawl. Arizona’s economy had been booming prior to COVID-19, and Boillot says he is still getting multiple calls a week from clients planning on moving to the region for work.
“I’m still seeing a lot of companies and businesses coming to the Valley,” he says. “We still have some very high-paying jobs and people are still moving here.”
But Boillot admits that many of the lower paying jobs lost during the pandemic may not be coming back, as so many small businesses have been forced to shut down permanently. More will still.
“It’ll be interesting to see how many companies are actually able to survive and bring these people back on full-time,” he says.
For now, that remains the three-trillion dollar question.
