Total initial claims grew in California the week of September 4 while dropping in the rest of the nation.

In California, initial claims under the regular program grew 9.9%, although the data indicates the current week is an estimate by the state and is likely to be revised more than usual in next week’s data. Initial PUA claims dropped 4.2%. Nationally, regular program claims were down 2.7%, moderated largely by a rise in hurricane-struck Louisiana and as the result of auto plant closures due to parts shortages in Michigan. Total initial claims were up 3.8% in California, and down 3.6% in the US.

This week’s data is the last prior to the September 4 expiration date for the bulk of the enhanced federal pandemic provisions. EDD, however, has indicated they will continue processing claims covering the eligible periods which will continue to affect the data over the next few weeks.

EDD has not yet updated their backlog data, last reported for the week of August 28 as a combined total of 267,141 under EDD’s new definitions. The related Call Center data similarly has not been updated. The last reported data for the week of August 28 indicated it still required an average of 9.5 calls to reach EDD.

In the most recent data from EDD, California paid out a total of $170.7 billion in benefits under all the UI programs since the week of March 7, 2020 and through the week of August 28, 2021. The most current estimate from EDD is that up to $31 billion of unemployment benefits was paid out to fraudulent claims, consisting of $11 billion in known fraud and up to $20 billion in suspected fraud. Individual cases continue to unfold. Nationwide, current fraud total estimates range from $87 billion to $400 billion.

The most recent data from the US Department of Labor indicates California’s outstanding loans as of September 7 from the Federal Unemployment Account dropped to $19.5 billion as the latest quarterly payments offset a portion of the growing debt. Combining EDD’s May projections with the cash flow results to date, total debt is likely to reach around $30 billion by the end of 2022. This amount is far more than twice the peak of about $11 billion reached during the previous recession that began in 2008. That debt took 10 years to pay off through higher employment taxes imposed on businesses by both the state and federal governments.

The latest federal debt data, however, also illustrates the high degree to which this soaring debt was the result of pandemic policies followed in California and at best in a few other states. The quarterly revenue inflows mean that only 10 states and one territory (Virgin Islands) now have a debt to the federal fund. California constitutes 43% of the total.