September 18, 2020
As a result of the COVID-19 pandemic, California has experienced an unprecedented rise in unemployment. Through March and April, the key measure that captured the impact of the virus on the state’s workers was the number of new unemployment claims being filed each week. Equally important going forward, however, will be the level of continued claims—the total number of people receiving unemployment benefits each week. Should continued claims decline, it could signal that some businesses are bringing workers back. Should continued claims keep rising, however, it could signal that a V-shaped recovery may be less likely. Note: This post includes data on claims paid under Pandemic Unemployment Assistance (PUA)—a new program that provides unemployment insurance for self-employed workers. We recently became aware of an unknown but potentially large level of fraudulent activity within the program. We therefore caution against drawing conclusions about the labor market from PUA claims data.
Claims for Unemployment Insurance Remain Elevated. California processed 230,225 claims for regular unemployment insurance between September 6 and September 12. This amount is generally consistent with levels seen since the initial pandemic workload peaked and then subsided in late March and early April.
Following New Certification Rules, Claims for Self-Employment Benefits Fall Sharply. During August and early September, claims for the federal Pandemic Unemployment Assistance (PUA) program for self-employed workers spiked unexpectedly, as shown in the figure. To limit potentially fraudulent claims, the administration stopped automatically approving backdated PUA claims. Early signs suggest this change has discouraged fraudulent claims, as processed PUA claims fell by more than 50 percent this past week relative to the week before.
Regular Continued Claims Hold Steady at 3.4 Million. As of September 12, California had 3.4 million employees receiving regular unemployment benefits, roughly level with the recent peak.
First Benefits Paid from New Federal Lost Wages Assistance Program. Benefit payments from the federal Lost Wages Assistance program, which allows states to temporarily increase weekly benefits by $300, were paid out for the first time last week. The state distributed roughly $1.3 billion in federal benefits under this program during the week ending September 12. This amount corresponds approximately to the first of five weekly add-on benefits approved by the federal government. The state currently is applying to receive a sixth week of federal funding under this program.