As California resumes reporting the weekly results, initial claims in the regular unemployment insurance program were down for both the state and nation. Initial claims in the week of October 17 in California fell 9.8% from the newly reported prior week. Initial claims nationally dropped 8.8% from the revised unadjusted numbers that incorporate the California results. 

In the new numbers now available to fill the 3-week data gap, initial PUA claims by the self-employed showed the strongest change, dropping to a quarter of the claims filed in the week just prior to EDD’s pull back and 6% of the peak filing week. While at least some portion of the peak experienced towards the end of August in this program likely was from fraudulent or otherwise ineligible claims both intentional and unintentional—a situation that was a likely outcome as with any other government program offering new benefits in a hurried administrative roll out—there are other economic and regulatory factors that likely explain contributors to that surge as well as discussed in our prior weekly reports on the program. The extreme drop in the number of initial claims is likely the result of the new message of fraud enforcement surrounding this program, potentially reducing the number of otherwise eligible applicants for this new emergency assistance. In addition to self-employed, independent contractors, and business owners, eligible applicants are others who do not qualify for the regular UI program, including:

• Persons who cannot work because they are caring for a dependent whose school or care facility has closed due to COVID-19.
• Persons with a limited work history.
• Persons who have used all their regular UI benefits as well as any extended benefits.
• Persons who have been diagnosed or who are seeking a diagnosis for COVID-19, been told to self-quarantine, have a family member diagnosed with COVID-19, or have become the main income provider due to a COVID-19 death in their household.

Childcare responsibilities continues to be a significant source of voluntary unemployment as decisions on school reopenings remain in flux in much of the state, especially for lower wage workers unable to sustain employment through telecommuting either due to the nature of their job or due to restrictions from California-only regulations. The number of persons exhausting their regular benefits is also looming as a more significant factor as long-term unemployment increases. The recently released EDD data shows a total of 709,904 applications over the past 4 weeks for the new Pandemic Emergency Unemployment Compensation providing extended benefits.

The essentially stabilized level of total initial claims over the past four weeks is consistent with the recent September labor force numbers that show a slowing in the state’s economic recovery. Claims have leveled off around an average of about 190,000 a week as workers end temporary jobs, employers adjust employment levels to the lengthening of the crisis, businesses especially small businesses close, and as temporary layoffs continue to shift to permanent. Both employment and jobs growth have slowed in the last two months, and further progress in cutting the number of initial claims will require a stronger surge in jobs to employ these workers. In the latest results using the October 19 adjustments from the Department Public Health, 87.8% of unemployed workers in September are in counties under the top two, most restrictive tiers. Substantial changes in the current initial claims trends are unlikely until this situation eases.

Total claims in the rest of the US continue to be relatively level since the second week of August. The new EDD brings the California trend down closure to the other states’ but still at an elevated level.

As of October 21, EDD reported an initial claims backlog affecting 331,492 workers, down from 451,724 on October 7. At the current rate from the prior 7 days, it would take 33 days to eliminate the backlog entirely. The backlog in processing continuing claims stood at another 773,928 workers, down from 889,871 from October 7. At the current prior week’s rate, retiring this backlog would take 196 days. The charts below contain the daily backlog numbers for unique claimants, with some workers having more than one claim in the backlog. EDD defines the initial claims backlog as those that have taken more than 21 days from filing to issue the first payment or disqualification, regardless of whether action by the claimant or EDD is required. The continued claims backlog covers those that have received at least one payment and are now waiting more than 21 days for processing of further payment or disqualification.