Main Street

1.7 Million First Unemployment Insurance Payments in June & July

First-time payments of unemployment insurance to those filing new initial state claims topped 1.7 million in the two month period of June and July, according to data made available by the Department of Labor.

That data showed approved first payments by states to newly jobless workers were 812,222 in June and 898,968 in July, the two most recent months for which statistics were available. The two-month total is 1,711,190 first-time payments to new unemployment claimants.

Because the most recent extension of federal emergency and extended benefits would only be available to those who exhaust their state-based benefits before November 30, most of those newly jobless after June 1 will only be eligible for 26 weeks of regular state benefits — unless an additional extension is enacted.

Under current law only 12 states, plus Puerto Rico, would continue to offer an additional 13 or 20 weeks of Extended Benefits to those who become unemployed after June 1, if their 3-month average unemployment rate is at least 6.5% or 8.0% respectively. Those states are Alaska, Connecticut, Kansas, Minnesota, New Hampshire, New Jersey, New Mexico, North Carolina, Oregon, Rhode Island, Vermont and Washington (New Hampshire and Vermont are currently below 6.5%).

The weekly reports of initial unemployment claims and related statistics available on the DOL website do not distinguish between actual new, first-time claims and those initial claims that are filed to renew benefits following the end of temporary jobs. But the states do provide DOL with monthly data of the new, first-time claims as well as the number of approved first-time unemployment benefit payments. And it’s that data that DOL provided, in response to a request.

The nearly 900,000 first-time payments in July were 20 percent more than those in December 2007, the official start of the Great Recession, and also more than the 837,000 in October 2009, when the overall unemployment rate hit 10.2 percent.

The chart above shows first payments for new state unemployment insurance claims, as reported monthly by the states to DOL. The data is not seasonally adjusted. I chose to start with June 2007 as it came one year after the initial collapse of the housing bubble and six months prior to the official start of the recession.

First payments on new state unemployment claims closely track the trends in overall initial claims. And they tend to follow seasonally-related patterns, even during recessions. The highest peaks tend to be in January, as retail and construction in particular reduce payrolls. The smaller, interim peaks tend to be in July. First time payments tend to decline again in August. But since overall initial claims have continued to rise during this August, the two-month rise in first payments in June and July may well continue. When August data becomes available, we’ll have an update.

The author is the winner of the 2010 CREDO Mobile/Netroots Nation award for Blog Activist of the Year.

Tags: jobless benefit extension, unemployment