When lockdown restrictions began to lift in May and workers started returning to their jobs, the number of people collecting unemployment checks began to fall fairly quickly and then settled into a slower pattern of decline.
Figure 1 shows the number of “continued claims” reported statewide by the State Employment Security Department (ESD). Continued claims are claims that ESD has deemed valid and eligible for payments. A claim remains in “continued” status until the claimant has not filed a weekly benefit claim for four weeks (claimants are not required to report their employment status–they just stop filing weekly claims for payment). So in any given week, some number of continued claims represent workers who have gone back to permanent employment within the past three weeks. At the same time, continued claims do not include the newest claim filers.
The number of businesses that reopen will begin to slow, as we get down to the sectors that simply cannot operate as long as the pandemic rages on. Much of the entertainment and travel business will remain closed or severely curtailed for the foreseeable future. Some workers will shift over into sector that are expanding, like internet commerce and logistics, but others will remain unemployed.
And even as workers return to jobs or find new ones, employers are laying off workers as they find they cannot sustain their operations during the slow recovery. But on net, workers leaving unemployment status outnumber those joining, hence the falling number of continued claims.
Figure 2 shows the change in continued claims by occupation between the week ending April 18 and the week ending August 15.The employment share is based on average employment for that occupation in 2019.
The drop in claims has been most pronounced among construction occupations and manufacturing. Food service occupations, where the most job loss occurred, have returned somewhat, but unemployment remains high in the sector. Management occupations, which stretch across the economy, also suffer from continued high unemployment.
(Data on unemployment claims are not a good measure of actual unemployment levels. The employment status of individuals is determined by surveys conducted by the U.S. Department of Labor each month during the week that contains the 12th day of the month. Monthly unemployment figures are reported about three weeks into the following month.)
Now that the easier part is done, it is difficult to predict the path ahead. Too many factors are in play. Will we have a resurgence of COVID cases as the weather turns? Will schools remain closed? Will large employers keep extending the time their workers can work from home (and not patronize restaurants and stores)? Will we have a normal holiday shopping season? Will a reliable vaccine appear in time for the 2021 visitor season?
In all, it looks like the employment recovery has been better than the doomsayers predicted, but not quite as fast as the optimists hoped. With unemployment now below 10 percent at the state level and near 8 percent in the Seattle area, we are out of the realm of the truly scary and back into the realm of just really bad recessions.