The latest report on initial claims for unemployment insurance, covering the week ending March 28, came out this morning. Nationwide, initial claims were up 6,648,000, more than double the size of the record-breaking increase from the previous week (which was revised up by 24,000). For Arkansas, initial claims totaled 26,944, nearly three times the number from the previous week. The Arkansas increase was a record high, exceeding even seasonal end-of-year peaks recorded in 2001 and 2002.
The report from the Department of Labor noted that comments from states continued to cite the COVID-19 virus as a factor, and that the job losses were “related to the services industries broadly, again led by accommodation and food services.” The report when on to report broader impacts: “Many states continued to cite the health care and social assistance, and manufacturing industries, while an increasing number of states identified the retail and wholesale trade and construction industries.”
In order to put the numbers in perspective: If we take the number of initial claims over the most recent two weeks, add that to the number of unemployed in February, and subtract it from the number of employed, we get a hypothetical unemployment rate for the U.S. of 9.2%. For Arkansas, the same calculation yields a hypothetical unemployment rate of 6.2%.
This is not how the actual unemployment rates are calculated. A survey polls individuals on their employment status during one “reference week” each month (usually the week including the 12th of the month). Consequently, the unemployment numbers for March are unlikely to capture the late-month surge in the newly unemployed.