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The Ominous Reason Continued Unemployment Claims Have Improved

By Kurt Osterberg · On September 19, 2024

Image Source: PexelsContinued weekly unemployment claims have fallen from 1.87 million on July 20 to 1.83 million on September 7. Why?The level of 27 week or longer unemployment hit 1.533 million in August of 2024. That is up from 1.203 million in February and 1.050 million in January of 2023.Expiring Unemployment Benefits

Most states offer 26 weeks of unemployment benefits.

Many states with a maximum of 26 weeks use a sliding scale based on a worker’s earnings history to determine the maximum number of weeks they qualify

Arkansas, Iowa, Oklahoma, South Carolina, Missouri, North Carolina, and Kentucky have a lower number of week.

Massachusetts allows up to 30 weeks depending on conditions. Montana allows 28 weeks of benefits.

Benefits ExpiredOther than Montana and Massachusetts, continuing unemployment claims die at a maximum of 26 week.Continuing claims have been declining because maximum benefits have expired, well before 26 weeks in some states.Continued Unemployment ClaimsThe above chart is more accurate than BLS data, but horribly misleading.Unemployment Level 27+ Weeks DetailMarch of 2023 was as good as it gets in terms of long-term unemployment at 1.050 million.Since February of 2024, long-term unemployment is up by 330,000 (+- BLS Accuracy and Revisions).That means current continued claims are off by a similar amount if we wish to discuss the real economy.The Real EconomyReal Economy Chart Notes

To understand the real state of the economy, we add the number of people unemployed 27 weeks or longer to the number of continued claims.

Continued Claims are weekly figures. The above chart shows the monthly average of continued claims.

The Real Economy DetailReal Economy Detail Chart Notes

Those unemployed 27+ weeks bottomed at 1.050 million in March of 2023.

Continued Claims plus those unemployed 27+ weeks bottomed at 2.556 million in July of 2022.

Between May of 2022 continued claims rose but long-term unemployment dropped.

The third bullet point above tells a story of people expiring their benefits then rushing to find a job. Fancy that.But that strategy is no longer working. In fact, it’s the opposite. People are exhausting their benefits, unable to find a job.Unemployment Level 15+ Weeks and 27+ WeeksSpotlight JobsAugust 22: A Breakdown, by Sector, of the Negative 818,000 BLS Job RevisionsSeptember 6: Payroll Report: Manufacturing Sheds 24,000 Jobs, Government Adds 24,000, Big Negative RevisionsSeptember 7: BLS Negative Job Revisions 15 of Last 21 MonthsSeptember 9: Fed Beige Book Conditions Are Worse Now Than the Start of the Great RecessionOminous TrendHistory suggests that once you hit 15 weeks of unemployment you are highly likely to get to 27 weeks.Also see The McKelvey Recession Indicator Triggered, But What Are the Odds?Good luck with this set of conditions. Just don’t lose your job.More By This Author:Mortgage Rates Rise Following Fed’s Big Interest Rate CutExisting Home Sales Decline For The 24th Time In 31 Months Dot Plot Of Fed Projections Suggests 1-2 More Quarter-Point Cuts This Year