Initial claims again rose substantially in California during the week of February 13. Overall claims rose as well in the US as a whole due to the California numbers and an upsurge in PUA claims in Ohio.

In California, initial claims processed in the regular program were up 15.0% compared to the prior week, although the Department of Labor report indicates the California number was estimated rather than reflecting actual claims processed. PUA claims were up less sharply at 5.8%. In the national totals, regular claims were essentially level, edging down only 0.7%. PUA claims instead soared 51.0% as the result of a 222,000 spike in claims in Ohio. Combined, total claims processed rose 13.1% in California and 13.9% in the US.

The latest week’s results continue to keep California’s trend above the other states even with the results in Ohio.

With the stay-at-home orders lifted on January 26, the state’s underlying Tier restrictions remain 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 16 from Department of Public Health show only one change in the Tier designations, with Plumas County moving from Tier 1 to Tier 2. Virtually all of the unemployed from the December numbers continue to be in counties under the most restrictive Tier 1 provisions. Prospects for any significant change in the unemployment claims numbers consequently remain minimal.

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.

Remaining below the US average, California dropped from 19th to 14th lowest vaccination rate in the most recent data from Centers for Disease Control. This trend reversal came in spite or reduced new vaccination supplies, with deliveries to the state dropping to 900,100 for the week compared to 1,478,375 in the prior week. A similar drop nation-wide occurred as well, going from 12.3 million to 5.1 million but with California increasing its share of new deliveries from 12% to 18%.

The unemployment insurance backlogs continued to expand in the most recent data from EDD. Backlogged continuing claims as of February 10 were up 14% from the prior week. Backlogged initial claims rose another 1%, primarily due to “waiting for claimant certifications,” but ‘resolving other eligibility issues” is behind an increasing share of the rise. Combined, total backlogged claims were at 1,028,684, or 6% 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 $120 billion in benefits under all the UI programs in the period March 7 through February 6. 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. The $120 billion amount also does not account for the additional $300 a week in enhanced benefits authorized under the federal pandemic relief bill passed in the December. Unemployed workers were eligible for these enhanced benefits beginning December 27. California workers will not be receiving the enhanced amounts until at least the beginning of March due to administrative problems at EDD.

The most recent data from US Department of Labor indicates California’s outstanding loans from the Federal Unemployment Account were $19.2 billion, or 41% of the total amount owed by only 19 states. This amount does not include accumulated interest which under the second COVID relief bill is currently waived through March 14. Other rarely used provisions in federal law also allow the state to schedule payment on the interest over a three-year period.

As discussed in prior reports, the bulk of unemployment insurance claims have been filed by lower wage workers in California companies who are largely tied to the state—companies providing population-serving services such as retail trade and personal care services and tourism-related services especially in arts, entertainment and recreation and in accommodation and food services.

Our most recent report assessing the monthly jobs and unemployment data considered another side of the jobs equation—the CaliFormer companies moving jobs out of the state largely in response to surging costs of living that have continued to grow even during the pandemic crisis as the result of state policies and regulations. As discussed in that report, moving jobs out of the state can take one of various forms: (1) moving the entire company, a less frequent action that is taken primarily by small and medium companies; (2) moving units out of the state, especially back office operations previously providing middle class incomes for many households; (3) expanding in other states rather than in California; and (4) rapidly expanding telecommuting that now allows workers themselves to decide where to live and what level of living costs they want to pay.

CaliFormer companies and high individuals announcing moves since our previous jobs report include the following. Where indicated, companies announcing major subleasings are those intending to shift to a broader telecommuting work model in the post-pandemic period.