Unemployment claims are a useful indicator of the health of the state’s economy. Today the U.S. Department of Labor released data on the number of unemployment claims processed by state labor departments during the week of April 5 to April 11. Below we offer some observations on these weekly claims data.
Historically High Claims. California had 660,966 initial claims during this period. Claims have ticked down for two weeks in a row after peaking at about 1 million during the week of March 22 to March 28. Nonetheless, the claims total for April 5 to April 11 is still six times greater than the record high prior to the COVID-19 outbreak of 115,462 in January 2010.
Level of Claims in California in the Middle of the Pack Among Large States. Over the last three weeks California has processed about 2.8 million unemployment claims. These claims represent about 16 percent of the state’s workforce. On this metric, California is in the middle of the pack among large states.
COVID-19 Downturn Already Deeper Than Great Recession. California now has around 2 million workers with active unemployment claims. This is more than double the peak of active claims during the Great Recession. That being said, a major factor that contributed to the severity of the Great Recession is that so many people were unemployed for such a long period of time. While the current number of unemployed workers exceeds the Great Recession, it remains to be seen how long these workers will remain without work.
High Level of Claims Will Continue. In a previous post, we pointed out that there is a relatively strong historical relationship between Google search interest in unemployment insurance during a week and the number of unemployment claims in that same week. Search interest spiked to unprecedented levels about a month ago. Over the last two weeks, search interest has decline modestly, but still remains significantly higher than at any other time in the last fifteen years, including during the worst of the Great Recession. As a result, we anticipate that claims will continue to be in the hundreds of thousands per week for at least the next few weeks.