While still well above pre-COVID levels, total initial claims (regular UI plus PUA) finally showed some improvement for the week of August 1, easing 7.9% in California. Progress was even more pronounced in the rest of the country, with total initial claims (unadjusted) dropping 22.5% for the US as a whole.

In California, initial claims for the regular UI program were down 6.9% from the prior week to 228,530 (unadjusted). These were more than matched by a somewhat higher drop in PUA claims by the self-employed at 9.3% to 203,894. The overall level remains high, but is a (one-week) reversal of the upward trend seen since the week of May 30. 

For the US as a whole, the seasonally adjusted numbers for the regular UI program show a drop of 17.3% to 1,186,000. The unadjusted numbers which in the current circumstances dominated by COVID factors is a better measure of current trends showed a continued drop in initial claims for the regular UI program, with the weekly numbers down 18.5% to 984,192. Nationally, PUA claims were also down, dropping 27.8% to 655,707.

Comparing the claims trajectories to the week of May 9 (the week following the initial spike in PUA claims), total initial claims in California (regular UI plus PUA) were up 24% over this period, while the total was down 42% for the rest of the US. This data again indicates how much more severe the economic downturn has been in California, along with the challenges this situation presents for the ability of the state to move quickly through the upcoming recovery period.

Combining the initial claims numbers along with a sustained rise in the continuing claims data, 6.44 million California workers were receiving or applying for unemployment insurance last week, up 6% from the week before. This number, however, does not include initial and continuing claims for PEUC and other much smaller benefit programs.

Although not included in the figures below, claims under the new Pandemic Emergency Unemployment Compensation (PEUC) program continue to show significant numbers. This new category allows an additional 13 weeks of coverage for persons who have exhausted their regular benefits, including previous eligibility for the additional $600 a week. California claims were up to 248,098 or 22% of total claims nationally.

Recent reports by California Policy Lab indicate that initial claims have remained elevated in recent weeks in large part due to a second wave of layoffs working its way through the state’s economy. From a detailed analysis of EDD’s data, 57% of regular program initial claims for the week of July 25 were claims that were additional claims—claims that were previously filed, closed after the claimant returned to work, and then reopened as that work also ended. Additional claims were only at 5% at the peak of the current crisis, but now have expanded to more than half of the current total. In all after adjusting for more than one claim filed by individuals, the report estimates that 32% of the entire labor market in the state has filed for unemployment at some point during the current crisis.

In part, the growing level of additional claims reflects the round of reclosings ordered in California. An additional but growing factor stems from the increasing shift from temporary to permanent layoffs as businesses are forced to close and—looking ahead at likely economic conditions looming for the state—employers make hard decisions on which employees they will be able to rehire. The California Policy Lab reports that as of the week of July 25, 61% of new claimants in the prior two weeks expect to be recalled by their employer. While still at a substantial level, this number is down markedly from the 90% in March who expected that the layoffs would only be temporary.