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America’s Unemployment Numbers Are Stabilizing. That’s Not A Good Thing.

Processing the ongoing economic damage caused by the COVID-19 pandemic can be a daunting task. The numbers involved are often so far out of scale with the rest of our historical data that it’s difficult to even contextualize what they mean. For instance, 2.4 million more Americans filed for unemployment in the week ending May 16. On the one hand, that’s the lowest weekly total since March 14; on the other hand, it’s still 3½ times as high as the previous weekly record from before March, part of a nine-week stretch that’s seen 38.6 million initial claims filed across the country.

As lockdowns have begun to lift in all 50 states, we might expect the pace of job losses to slow down if businesses are able to reopen and begin bringing workers back (or begin posting jobs for positions that need to be refilled). But if that’s going to happen, it’s tough to find much evidence for it yet. According to data from the employment-search website Indeed, the number of jobs posted by employers last week was only marginally higher than it had been the week before — still down nearly 40 percent year-over-year from the same week in 2019. And, if anything, unemployment claims are dropping more slowly than we might have anticipated just a few weeks ago.

After consistently declining by an average of 16 percent each week from April 11 through May 9, initial claims were down only 9 percent week-over-week in the Department of Labor’s most recent report:

Perhaps the silver lining in all this dire unemployment data is the prospect of jobs not being permanently lost — that, through layoffs and furloughs, people might be out of work now but could return to their jobs when their employers reopen. And the most recent jobs report does provide more information on that. According to the Bureau of Labor Statistics’ Current Population Survey, about 78 percent of all unemployed Americans in April were classified as being “on temporary layoff”; that group also made up 88 percent of those who lost or completed jobs (as opposed to voluntarily leaving jobs or reentering the ranks of the unemployed). That supports the idea that the vast majority of jobs that have been lost to COVID-19 could eventually return.

To get a more granular view of this in (near) real time, we can also look at filings made under the WARN Act, which generally requires employers with 100 or more workers to give a 60-day notice about plant closings and other mass layoffs. States post their WARN data in somewhat different formats, so we looked at just two: California and Texas.

California experienced the largest total number of job losses in the last state-level employment data release from the BLS, and the share of total affected employees who were temporarily laid off (87 percent) in its WARN data1 almost exactly matches the national percentage. It also gives us a snapshot of ongoing unemployment under ever-evolving lockdown conditions, since Gov. Gavin Newsom has lifted stay-at-home orders for some counties but not others, generally taking a more cautious approach to reopening than many other states.

According to California’s WARN Act data, the share of all layoffs that are temporary hasn’t changed much throughout the crisis, mostly hovering around its current mark of 84 percent. (This might be an encouraging sign, since it means those jobs aren’t being permanently eliminated any more now than they were a month ago.) The total number of layoffs has also stayed relatively flat, at a rate of about 3,100 per day since mid-April, with a recent spike attributable to a 11,083-employee temporary layoff by Tesla Motors at its Alameda County factory, which has since reopened. This, too, seemingly mirrors the overall national unemployment picture, with the rate of new claims flattening after the huge initial spike of March and early April — creating a steady flow of people filing for insurance.

Will that trend change when lockdowns are lifted more fully? We can contrast California’s situation with that of Texas, which saw the second-most job losses of any state in March and allowed its stay-at-home order to expire on April 30. The state’s WARN Act data doesn’t differentiate between temporary and permanent layoffs — and its numbers have generally been lower than those reported by California anyway — but the seven-day rolling average of layoffs has generally dipped since late April, when a large number of franchise locations owned by Bloomin’ Brands (which manages such restaurants as Outback Steakhouse) made WARN filings.

Some caveats: The WARN Act doesn’t apply to every business, and this data doesn’t capture unemployment outside of mass layoffs and plant closings. But it is another way to paint the picture of unemployment — and of layoffs or furloughs in particular — on a faster time frame and a more detailed level than the official data updated by the U.S. government.

But the slowing decline in initial claims nationwide, even as states make efforts to reopen, is something to watch. Against the backdrop of concerns that reopenings have already planted the seeds for further outbreaks — which may necessitate another round of economic shutdowns — our national unemployment crisis could be settling into a long period of despair before things truly improve.

FiveThirtyEight Politics Podcast: The US is starting to reopen. Is it ready?


  1. Since the first week of March.

Neil Paine was the acting sports editor at FiveThirtyEight.