Unemployment Insurance Claims Surge Upward

Initial claims for unemployment insurance across the U.S. were 248,000 for the week ending Feb. 12, 2022, on a seasonally adjusted basis. This represented a increase of 23,000 (10.2%) from the revised figure for the prior week. The upsurge reversed three consecutive weekly declines and was 13.2% above the estimate of 219,000, per economists polled by Reuters.

The four-week moving average for initial claims fell to 243,250, down by 10,500 (4.1%) from the revised figure for the prior week. In December 2021, initial claims had fallen to 188,000.

Omicron Impact Lessens, Yet Claims Rise

Jobless claims had been declining since they reached a three-month high in mid-January while COVID-19 cases, particularly those from the omicron variant, surged. The United States is reporting an average of 145,769 new COVID-19 infections per day, sharply down from more than 700,000 in mid-January, per analysis by Reuters.

Labor Shortages Put Brake on Layoffs

Meanwhile, there is a severe shortage of workers, as evidenced by a near record 10.9 million job openings as of the end of December 2021. This has left employers keen to retain employees, sending jobless claims below their pre-pandemic levels. Jobless claims have plunged from a record high of 6.149 million in early April 2020.

Veronica Clark, an economist at Citigroup in New York, told Reuters: "While some level of labor market churn should continue in the near term, we would not be surprised to see claims fall even further below pre-pandemic levels in the coming months. This would reflect an overall low level of layoffs as businesses struggle to reach desired levels of employment in the first place."

Continuing Claims Decrease

Unemployment insurance continuing claims fell, although compilation of this data lags new claims by one week. For the week ending Feb. 5, 2022, the number of continuing claims, also called the number of insured unemployed persons, was 1,593,000, a decrease of 26,000 (1.6%) from the revised number for the prior week, on a seasonally adjusted basis.

The four-week moving average for continuing claims fell by 7,750 (0.5%) from the revised figure for the prior week to 1,626,250. The previous week's moving average had been revised downward by 500 (0.03%), from 1,634,500 to 1,634,000.

Adjusted vs. Unadjusted Data

The seasonally adjusted nationwide initial claims figure of 248,000 cited above for the week ending Feb. 12, 2022, was derived from an unadjusted figure of 238,482. The unadjusted figure rose by 7,742 (3.4%) from 230,740 in the prior week. However, the normal seasonal factors observed at this time of year should have led to a decline of 14,676 (6.4%) from the prior week to 216,064 in the week ending Feb. 12, 2022, all else equal. During the comparable week in 2021, there were 835,045 initial claims.

Initial Jobless Claims by State

Most states reported declines in new claims, led by 1,768 fewer unadjusted initial claims in Pennsylvania, 1,073 fewer in New Jersey, and 1,032 fewer in Wisconsin. The largest increases in unadjusted initial claims were 7,130 in Missouri, 5,302 in Ohio, 4,535 in Kentucky, 1,640 in Tennessee, and 1,001 in Illinois. Note that the statistics compiled by the U.S. Department of Labor also include the District of Columbia, Puerto Rico, and the Virgin Islands, in addition to the 50 states. As indicated above, total unadjusted new claims rose by 7,742 during the week ending Feb. 12, 2022.

However, the U.S. Department of Labor cautions that the breakdown by state for the week ending Feb. 12, 2022, contains what are called advance claims. These advance claims are reported by the state liable for paying the unemployment compensation. However, data for previous weeks classify claimants by state of residence. Thus, the state-by-state figures for the week ending Feb. 12, 2022, and the prior week are not completely comparable.

For comparable figures, the Department of Labor instead looks at the data for a week earlier, which ended Feb. 5, 2022. The largest increases in initial claims for that week, compared to the week before that, were in Michigan (+2,884), New Jersey (+406), Kansas (+309), Delaware (+235), and Maryland (+148), while the largest decreases were in California (-4,247), Kentucky (-3,962), Tennessee (-2,916), Illinois (-2,303), and Indiana (-1,760).

Highest Insured Unemployment Rates

Meanwhile, the highest insured unemployment rates for the week ending Jan. 29, 2022, were in Alaska (2.7%), California (2.7%), New Jersey (2.6%), Minnesota (2.5%), Rhode Island (2.4%), Massachusetts (2.3%), New York (2.3%), and Illinois (2.2%). The advance seasonally adjusted national figure for the week ending Feb. 5, 2022, was 1.4%, unchanged from the revised figure for the prior week. The insured unemployment rate is the ratio of persons receiving unemployment benefits to the total number of persons in the labor force.

During the week ending Jan. 22, 2022, extended unemployment benefits were available in New Jersey and New Mexico.