Economics & Growth | Monetary Policy & Inflation | US
Weekly Claims Point To Further Q4 Growth Risks
- By Dominique Dwor-Frecaut
- 2 min read
Weekly initial unemployment benefit claims garner much market attention yet say little about unemployment (Table 1). They only capture regular state-provided unemployment benefits and form a small share of continuing claims. Furthermore, they last only 26 weeks on average, and an increasing number of unemployed are now exhausting state benefits and moving onto federal unemployment programs.
The CARES Act has funded two programs to supplement state benefits: Pandemic Emergency Unemployment Claims (PEUC) and Pandemic Unemployment Assistance (PUA). But the latter is unconnected to past unemployment contributions (‘non-contributory’ in economist jargon). So it’s more akin to a social welfare payment than social insurance. In other words, PUA claims are only loosely linked to actual unemployment, and we can ignore them in our estimates of this. Doing so, in mid-October claimants under the state programs represented only about two thirds of total claimants.
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