U.S. Jobless Claims Understate Reality With Gaps in Federal Data

(Bloomberg) -- The U.S. Labor Department's weekly jobless claims report has yet to reflect at least about half a million filings for a federal pandemic program, with data reporting lagging behind payouts.

Florida, Alabama, Arizona, Hawaii and West Virginia were among 15 states that showed zero initial claims under Pandemic Unemployment Assistance, or PUA, in the Labor Department's latest weekly report on Thursday. But the same states have actually reported about half a million in combined claims through the program -- established by the CARES Act -- which is aimed at helping those typically not eligible for regular state benefits, including the self-employed and gig workers.

The gulf between the Labor Department's data and state numbers -- compiled by Bloomberg through state press releases, comments by officials and related data -- indicates the labor-market hit from the coronavirus may be more widespread than thought. While it doesn't significantly alter the overall picture of mass unemployment as tens of millions of Americans have filed for benefits since mid-March, the undercounting further complicates closely watched data already beset by other errors and distortions.

The weekly claims report “does give a pretty incomplete picture of exactly what unemployment looks like right now, and not even necessarily how many people have lost jobs, but how many people are just not earning an income that they were used to earning before,” said Citigroup Inc. economist Veronica Clark.

The figures out each week have gained renewed attention for showing the depth of the economic damage from the coronavirus pandemic, as well as signs that a recovery is starting as business restrictions ease. The latest data -- ahead of the May payrolls report out Friday -- showed initial claims for regular state programs slowed to 1.88 million last week.

“States have been focusing on implementing the new programs and working through unprecedented claims volumes and some of the newer reporting has been delayed by the efforts to get benefits to the claimants that need them,” a spokesperson for the Labor Department said in an email Wednesday. The agency added that the abilities to report in the first few weeks and months of a new emergency program “typically vary across states and the current situation is no exception.”

Bloomberg's compilation of uncounted PUA claims is based in part on applications filed since the week ended May 30, which covered the most recent federal report issued Thursday.

The Labor Department's weekly report tracks an overall figure of initial PUA claims filed in any given week, but it's based on incomplete data -- in fact, just 36 states in the latest report. Any state that doesn't report data for the week is labeled with a zero.

The department said it's working with states to gather the missing figures to include in the weekly tally.

The 623,073 unadjusted initial claims for PUA that the U.S. Labor Department reported as filed in the week ended May 30 are separate from the headline initial claims number, which reflects applications for regular state programs.

New Systems

When the CARES Act created the PUA program in late March, state unemployment offices often had to create entirely new systems and portals to accept and administer the benefits.

Alaska, which has received more than 10,000 of these claims, approached the new program in three stages, according to Clifford Napier, assistant director of unemployment insurance at Alaska's Division of Employment and Training Services. The state has been accepting PUA applications, and paying them out, but just not reporting the activities yet, Napier said earlier this week.

Alaska reported 1,571 initial claims for PUA in the week ended May 30 on the national report out Thursday, after prior weeks showed zero.

A spokesperson for Alabama's Department of Labor said Tuesday the state has had some unspecified challenges reporting the figures to the U.S. Labor Department, but hopes to have the issues resolved this week. Over a six-week period, the state received more than 55,500 initial claims for PUA benefits.

Another issue occurs when state numbers for PUA claims aren't readily available at the beginning of the week. That's what happened with Maine's figure in last week's report, according to Jessica Picard, a spokesperson for the Maine Department of Labor.

The result: the May 28 federal report showed zero initial PUA claims from Maine for the week ended May 23, even though Maine reported it had 20,500 for that week.

The latest federal report did incorporate Maine's numbers, revising the prior week's zero to 20,577 and showing 13,487 PUA claims for the week ended May 30.