MEF Analysis: New Unemployment Insurance (UI) Claims and Marin County
One way to determine the depth of effects from COVID-19 on Marin County residents is to watch new unemployment insurance claims (UI Claims). These numbers are reported monthly and are actual counts of people who filled out the paperwork to receive unemployment benefits and then were deemed eligible. The data counts the claimant by where they receive mail, which generally means where they live.
At the national level, there have been 22 million such claims in the last four weeks, leading the unemployment rate estimates for the United States in April of over 15 percent unemployment. For Marin County, the data for March 2020 (the latest data), the figure was 8,868. Compare that to February which saw 606 UI Claims; that is a 12-fold increase! Because the data for Marin County are monthly, we need a couple of months to go by before making a larger determination of how deep the crisis will become and its duration on Marin County’s residents who may be out of work.
The figure below shows the progression of UI Claims since 2002; notice the March 2020 data is such a big change, the changes on a monthly basis during the Great Recession (2008-10) is dwarfed by March 2020.
The larger issue is how does following these data tell us something about a change in the economy, perhaps before it happens. UI Claims are used in most leading (forecasting) indices in considering when recessions may start and end. The natural connection of UI Claims to subsequent unemployment for workers allows us to compare UI Claims to the unemployment rate and perhaps see this forecasting ability. The figure below shows this comparison from Jan 2002, where both the UI Claims and the unemployment rate for Marin County have been seasonally adjusted.
In summary, notice there is a final peak of the unemployment rate as the Great Recession ended (November 2010, 8.1 percent), connected to the peak of unemployment insurance claims in December 2009. In theory, that is what we are looking for: UI Claims grow and peak, and then the unemployment rate grows and peaks.
What connects these is the duration of unemployment and the breadth of job losses. Watch for those data in the weeks and months ahead from Marin Economic Forum.
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