June 3, 2020
Although initial claims for unemployment insurance have slowed since the surge began in mid-March, they remain at historically high levels. During the week of May 23, 2.1 million workers filed claims. In comparison, at the peak of the Great Recession, weekly initial claims reached 665,000. Over the past 10 weeks, 40.7 million workers have filed claims. Compared to February employment, this represents 1 of every 4 workers in the United States.
In Michigan, initial claims have also slowed. During the week of May 23, Michigan processed 57,714 initial claims—roughly the same level as the prior two weeks and well below the peak of nearly 390,000 at the beginning of April.
However, the cumulative impact on layoffs is significant. Over the past 10 weeks, 30 percent of Michigan workers—1.5 million of them—have filed claims, one of the highest shares of any state (see map). Michigan is one of 11 states with cumulative filings over 1 million: California (4.7 million), New York (2.4 million), Florida (2.4 million), Texas (2.2 million), Georgia (2.2 million), Pennsylvania (1.9 million), Michigan (1.5 million), Ohio (1.3 million), Washington (1.3 million), New Jersey (1.1 million), and Illinois (1.1 million).
Not all these initial filings translate to sustained increases in the number of people receiving unemployment benefits. Some people are found ineligible, while others may have returned to work—especially as states have reopened their economies. Examining continuing claims gives a better gauge of the number of people still receiving benefits. The number of continuing claims fell nationally from about 24.9 million on May 9 to 21.0 million on May 16, its first decrease since the pandemic surge began. Continuing claims fell by more than 10 percent in five states (see map), led by Florida (-1.6 million) and California (-1.4 million). Florida’s continuing claims fell 76 percent, from 2.2 million to just over 500,000, after the state ended its stay-at-home order on May 4 and allowed the reopening of restaurants and stores, houses of worship, and beaches. (The two South Florida counties of Miami-Dade and Broward began reopening on May 18.) California’s continued claims fell by 40 percent after regional reopening of restaurants and shopping centers began on May 12.
For the week ending May 23, health care and social assistance had the most initial claims (9,356), about the same as the week before. The three industries with the next largest number of claims—manufacturing (8,515), retail trade (4,728), and administrative support (4,677)—each had slight decreases from the prior week. Accommodation and food services also saw a drop of 1,186 claims, coinciding with the reopening of hotels and restaurants in the northern half of the state prior to Memorial Day. The only industry with a significant increase in claims was educational services, roughly tripling to 3,917; the rise was likely associated with the approaching end of the school year.
In the week ending May 16, Michigan had 1.08 million continuing claims—virtually unchanged from the week before—and over 70 percent of the total 1.5 million initial claims cumulatively filed since mid-March. This suggests most people who filed are still receiving benefits.
Manufacturing has been one of Michigan’s hardest-hit industries. There were 256,290 continuing claims that same week, or about 40 percent of the industry’s February employment (see table). This marked an increase of 65,775 continuing claims over the previous week, driven heavily by transportation equipment manufacturing—autos and auto parts—which rose 45,858 claims to 110,935.
Continuing claims for health care and social assistance (129,081) and retail trade (102,926) changed little between May 9 and May 16. The claims for both are slightly under 25 percent of industry employment.
Governor Gretchen Whitmer has been gradually loosening restrictions on economic activity, and there are early signs firms are starting to rehire some staff as the economy reopens. On May 7, construction projects were able to resume, and during the following week the number of continuing claims in the construction industry decreased by 4,669 (−6.2 percent). Although the reopening of selected manufacturing industries on May 11 did not have a discernable impact (as noted above), there has been some improvement in restaurants and hotels. With the opening of these places Memorial Day weekend in selected coastal areas in northern Michigan, their continuing claims fell 67,849, a decline of 42.4 percent. We will take a close look at continuing claims in all of these industries in the coming weeks as the Michigan economy slowly reopens.
Since the surge of unemployment claims began, the three Detroit-area counties have been hit particularly hard. Continuing claims in Wayne, Oakland, and Macomb counties as of May 16 reached about 472,000, some 44 percent of the state’s total. In addition, Wayne and Macomb were two of only six counties with continuing claims representing at least 27 percent of their February labor force (see map below).
To illustrate the regional impacts of the reopening of hotels and restaurants in northern Michigan, the two maps show continuing claims for the week ending May 9—before the reopening announcement (below, top)—and the percentage change the following week, after the announcement (below, bottom). The sharp drop in northern counties, relative to southern Michigan, is clear. With the governor’s June 1 announcement that the rest of the state can begin to reopen restaurants on June 8, we will soon see whether the decline in continuing claims spreads south.