UI Claims Remain High as COVID-19 Cases Spike

November 19, 2020

Initial unemployment insurance (UI) claims rose last week, on a non-seasonally adjusted basis, holding above 1 million weekly claims for the 35th week in a row. Continuing claims dropped below their pre-pandemic record, set during the Great Recession, but this decline was driven, in large part, by 9 million claimants exhausting their benefits. Bottom line: claims remain at unhealthy levels, which flashes warning signs that the recovery is struggling to sustain steady progress at a time when COVID-19 cases are ballooning around the country.

On top of the millions of unemployed Americans who have already exhausted their UI benefits, an additional 12 million Americans face a looming benefits cliff at the end of the year when the PUA and PEUC programs will expire. Congressional failure to act would be an extraordinary blow to unemployed Americans, affecting over half of the 21 million current UI claimants. Even if President-elect Biden can negotiate a new package after his inauguration, an interruption in benefits for even a month would be a significant financial setback for unemployed Americans.

Compounding these issues, public-health experts are raising the alarm about the pandemic as winter approaches. Expiring benefits at the end of the year could create a vicious cycle where Americans are pushed back into the workforce when the virus is widespread, further spreading the virus and suppressing economic activity. The U.S. faces a potentially dark winter where the combined health and economic crises could echo some of the harsh impacts felt in the spring rather than the steady recovery seen over the summer.

Today’s UI Claims Report

Initial UI claims rose to 743,360 from 725,116, on a non-seasonally adjusted basis, according to the latest figures from the Department of Labor for the week ending November 14. On a seasonally-adjusted basis, claims rose to 742,000 from 711,000, rebounding from last week’s intra-crisis low.

Pandemic Unemployment Assistance (PUA) claims rose to 320,237. UI and PUA claims combined rebounded to 1.06 million, marking the 35th week with over 1 million new weekly claims. While the recovery has made progress over the last few months, it has slowed since the beginning of October.

Non-seasonally adjusted continuing claims for UI fell to 6.1 million for the week ending November 7, falling below the pre-pandemic record of 6.5 million set during the Great Recession. Despite a rapid decline in mid-September, the drop in continuing claims has slowed somewhat in recent weeks. The decline is also being driven, in large part, by the exhaustion of UI benefits for millions of unemployed Americans, overstating the rate of economic recovery.

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