A Claims Update!
We have new data, including some from the shutdown period
TL;DR: The latest initial claims data, which partly corresponds to the first days of the shutdown period, shows possible deterioration.
More below chart.
The Department of Labor has suspended publication of the weekly jobless claims report during the government shutdown, but the underlying state level data are still being updated. A few of the states haven’t reported the latest data yet (MA, HI, Virgin Islands), so I imputed the prior week’s values for those.
My current estimate is that initial claims were 235K (week ended 10/04) and continuing claims were 1.927M (week ended 9/27). The initial claims data therefore partly covers the first few days of the federal government shutdown. A year ago the southeast was pounded by Hurricane Helene so the Y/Y comparison is not useful, but I am a little worried that we’re above two-years-ago levels. In a few weeks we’ll know whether layoffs really are going up.
Continuing claims look OK, with a moderate increase over year-ago levels, but this data predates the government shutdown. If the shutdown really is causing job losses in the private sector (very possible as contractors are not being paid), then we’ll see continuing claims going up soon enough.
Starting next week (assuming we get fresh data), we’ll have an October nowcast for unemployment due to permanent layoffs. In September this nowcast showed a very modest improvement. I’m not sure this nowcast will be as useful during the shutdown as usual, because a lot of shutdown-induced layoffs in the private sector are likely to be temporary.
Finally, federal workers get unemployment insurance via a separate program that isn’t included in the regular claims estimates, but are tallied separately. The initial claims for these federal worker UI benefits spiked in the beginning of October. Several folks have pointed out this could be the results of the federal government RIF rather than the shutdown.1 I don’t know! It’s a small boost to the number of layoffs, and will be a small but boost to the stock of unemployment.
I’ve been asked whether people who took the early retirement buyout from the federal government are eligible to file. I don’t know - I would have assumed “no” as these are voluntary quits, but some states allow some buyout workers to file. I don’t know enough about the federal government’s eligibility criteria.