With the previous week’s numbers showing a somewhat higher upward revision than typical, total initial claims processed for the week of January 30 were once again up for California while easing slightly for the rest of the US. In both cases, total claims remain well above historic levels, but at a generally downward trend for California and largely stabilizing in the nation as a whole. While still high, these numbers suggest the economic situation is at least not getting worse, both from the number of layoffs and due to fewer initial claims in California as the state finally implements anti-fraud measures.

In California, initial claims processed in the regular program were up 79.3% compared to the prior week, while processed PUA claims were up 19.1%. In the national totals, regular claims eased 2.8%, while PUA claims dropped 13.5%. Combined, total claims processed rose 55.2% in California while easing 6.3% in the US.

The latest week’s results finally bring California’s trend more in line with the other states, which generally remain largely at stable although higher-than-trend levels so far in 2021.

With the stay-at-home orders lifted on January 26, the state’s underlying Tier restrictions again have become the core determinant in when jobs can resume, especially those for the lower wage workers that have been the hardest hit by the state’s chosen strategies. The most recent tier allocations for the week of February 2 from Department of Public Health show only marginal shifts from prior weeks, with only Alpine and Trinity Counties changing status, moving from Tier 2 to Tier 3. Virtually all of the unemployed from the December numbers continue to be in counties under the most restrictive Tier 1 provisions. Movement out of those restrictions—either through shifts in tier status or revision of the tier restrictions better reflecting ongoing improvements to the risk data—and consequently the reopening of jobs will be essential for the state to move to recovery. 

The chart above is based on the 1.7 million workers officially classified as unemployed in December. Adding in those leaving the labor force raises the total closer to 2.3 million.

Being able to move from the more restrictive tier allocations remains largely tied to the pace of vaccinations. While moving from the 13th to 17th lowest rate among the states, California’s injection rate remains below the US average in the most recent data from Centers for Disease Control. Continued lagging in the injection rate is particularly critical as the state’s COVID strategies produced the 3rd worst employment loss rate among the states in the December data, along with 13 of the 25 MSAs (out of 389) with the worst unemployment rates in the country. While accelerated progress on vaccinations is critical to resolving the public health crisis from the virus, similar progress on restoring jobs is critical is resolving other public health issues along with growing income disparity related to high and increasingly now long-term unemployment. In the last week, CDC data shows California receiving an additional 797,000 doses and injections increasing by 924,000. However, the state’s persistent shifts in its vaccine priority plans have not yet produced a stable process to accelerate vaccinations, while clarity and implementation feasibility of these provisions remain hindered by the continued “details to be announced later” nature of these nearly weekly shifts.

The continuing claims backlog remains largely under control in the most recent data from EDD, but the backlog for new initial claims continues to climb primarily due to waits for claimant certifications. Backlogged continuing claims as of January 20 were essentially level from the prior week. Backlogged initial claims were up another 3%. Combined, total backlogged claims were at 972,169, or 3% higher than the prior week. EDD defines backlogged initial claims are defined as those "applications for benefits that take more than 21 days to issue a first payment or to disqualify the individual, regardless of if the claimant or EDD need to take some kind of action." Backlogged continuing claims are defined as a "subset of all individuals who received at least one payment and are now waiting more than 21 days for further processing of payment or disqualification."

In the most recent data from EDD, California paid out a total of $116 billion in benefits under all the UI programs through the period March 7 through January 23. The most recent estimate is that up to $31 billion of this amount was paid out to fraudulent claims, consisting of $11 billion in known fraud and up to $20 billion in suspected fraud.

While the various emergency programs including PUA and extended payments under both the regular program and the new PEUC component paid from federal dollars, the regular UI program relies on the state’s UI account funded by employer contributions per employee. When the balance of that fund runs out, benefits continue to be paid through borrowing from the federal trust account.

The most recent data from US Department of Labor indicates California’s outstanding loans from the Federal Unemployment Account were $18.8 billion, or 39% of the total amount owed by 19 states. This amount does not include accumulated interest which under the second COVID relief bill is currently waived through March 14.