Initial claims eased 4.3% for the week ending November 6 in California, while rising 8.4% in the rest of the US largely due to increased claims in states with substantial vehicle manufacturing as that industry has cut production due to the current supply chain blockages. The seasonally adjusted number reported for the US dipped 1.5%, reaching a new pandemic low.

While the shift in the November 6 data showed some marginal improvement in the state’s position, California still contained 22.3% of all new claims that week. Reflecting California’s lagging recovery progress, the week’s claims were 40% above the average in pre-pandemic 2019, but only 18% above in the rest of the states.

As reported for the week of October 30, the revised EDD backlog dropped 17.5%, while the backlog due to all sources dropped 16.2%.

In the related Call Center data, overall activity continued to drop but with the number of calls answered up slightly. The average number of calls required to reach EDD consequently had its best improvement, but still saw an average of 4.7 calls to reach EDD staff.

In the most recent data from EDD, California paid out a total of $178.2 billion in benefits under all the UI programs since the week of March 7, 2020 and through the week of October 30, 2021. The most current estimate from EDD is that $20 billion of unemployment benefits was paid out to fraudulent claims, much of which was from the federal pandemic enhancements but which also includes the base payments from the regular program that in the absence of budget action will be paid back through higher taxes on employers.

The most recent data from US Department of Labor indicates California’s outstanding loans as of November 9 from the Federal Unemployment Account were $19.3 billion. EDD’s May projections indicated a $24.3 billion deficit by the end of 2021 and $26.7 billion by the end of 2022. The regular October revision does not appear to have been released yet.   

The latest federal debt data again shows this issue remains limited to 10 states and one territory (Virgin Islands), with 92% of the debt owed by only 5 states. California constitutes 43% of the overall total.  As discussed in a prior report, a recent Tax Foundation analysis shows that the issue has been handled differently elsewhere, with 31 states using $15.4 billion of their federal pandemic relief funds under the CARES Act and ARPA to support their unemployment funds. California is listed is allocating a total of only $6 million for this purpose, in spite of receiving the largest share of the federal funds and running up by far the largest state UI fund debt. Instead, California employers remain faced with one of the largest tax increases in the state’s history even as they continue to provide the base for a continuing surge in state revenues that are resulting in historic state surpluses. As reported by Department of Finance, general fund revenues through the end of September are already running $13.9 billion ahead of the levels projected in the current budget bill.