The week ended May 22 mark the lowest total of individuals filing in 14 months, and is 93% below the peak of 6.1 million.

By Manuel Gutierrez, Consulting Economist to NKBA

As expected, the number of people filing for unemployment fell during the week ended May 22 to 406,000 claims — 38,000 fewer than the prior week. This is the lowest number of claims submitted in any week since the middle of March 2020. Back then, claims jumped from 256,000 in the second week of March to 2.9 million on March 21, and rose further the following two weeks to reach the historic high of 6.1 million the first week of April.

Since then, as seen in the top panel of Figure 1, the number of claims has been falling weekly. The exception was the period from November 2020 through February 2021, when new claims hovered around 800,000 each week.

Over the past three months, however, as illustrated in the bottom panel of Figure 1, weekly claims have clearly been trending downward. The latest number is just 60,000 above the weekly average for the 20 years prior to the pandemic.

The most recently released unemployment claims are the lowest level recorded in 14 months.

The number of continuing claims, that is, the number of people who are actually receiving unemployment benefits, is down to 3.6 million. This is also a decline of 96,000 from the prior week. Despite what appears to be a high number, it is a great improvement from the peak of 23.1 million in early May 2020.

Still, the current number of continuing claims remains higher than the pre-pandemic weekly average of 2.9 million.

The vast majority of states have also seen a reduction in the number of claims since last year. Most of them are facing weekly claims that are just one-tenth of year-ago levels. That is, weekly claims are running 90% below their April 2020 peak.

Figure 2 displays the change in claims for the last six months compared to May 2020. Each point on any line is the percent change from that month. For example, the first point on the left panel is for New Hampshire, which is at the 45% mark. This means that in early January, claims in this state were 45% lower than their level at the beginning of the year.

The end point of that same New Hampshire line is around 95%, indicating great improvement for that state.

The other five states in the left panel generally display improvement over the last year. Note though, that some states, such as Florida, had already improved significantly at the beginning of this year. In early January, Florida’s claims were already 90% lower than a year ago. West Virginia is the other state with greater claims today than a year ago, exceeding that early level by 30%.

Larger states like California, because of its sheer size, will issue far more claims than a small state like Rhode Island. This makes any comparison based the actual number of claims misleading and difficult to interpret. For a better  comparison, Map 1 displays the relative importance of claims in a state measured against the state’s total employment. Essentially, this direct arithmetic ratio of claims-to-total- employment was developed  provides the number of claims per thousand persons employed.

The average across all states is 24 claims per 1,000, with Virginia boasting the best ratio of less than one claim per 1,000, while Wyoming and Nevada have the largest ratios. Wyoming’s high is 66 claims per 1,000 workers, with Nevada next at 56.

According to this measure, large populous states like Texas and Florida are performing well. Texas is the second-largest state based on employment, and ranks third according to number of claims. However, it’s in 36th place with a good ratio of 18 claims per 1,000 — below the national average of 24.

Florida performs even better, with a rank of 4th based on employment and a ratio of 15, which ranks it at a superior 41st nationally.

Charts: