Updating my series of 'America's Scariest Charts' for the latest data releases this week.

First: continued unemployment claims for data through the week of June 27th.


Continued unemployment claims fell from 18,760,000 in the week of June 20 to 18,062,000 in the week of June 27. Continued claims are now down 6,850,000 from their pandemic-period peak, which implies a decline of 978,571 per week since the peak. Based on the last two weeks' average weekly decline, it will take around 28 weeks to return continued unemployment claims to the pre-COVID19 levels.

Now, putting current crisis into historical perspective, the following chart uses log scale to show COVID19 recession experience in relation to all past recessions:


Next, new unemployment claims for the week of July 4, 2020. New claims in that week stood at 1,399,699, down slightly on the new claims in the eek prior at 1,431,343. Table below provides a summary:

Updated non-farm payrolls forecast for July 2020, based on June data for payrolls and the first data for July on changes in unemployment claims:



Average duration of unemployment is still completely swamped by the force and speed of the COVID19 onset, but is rising toward recession-consistent above-average territory:

I have been running a regular update on my 'America's Scariest Charts' covering labor markets developments (see most recent one here: https://trueeconomics.blogspot.com/2020/07/2720-americas-scariest-charts-updated.html). These charts rely heavily on two data sets: Non-Farm Payrolls data (monthly frequency), and initial unemployment claims (weekly frequency). I ignored for now two other data series:

1. Average duration of unemployment: this is, of course, rising, but from low levels, as the COVID19 crisis is still relatively young; and
2. Continued unemployment insurance claims: these data have been also proximate to the initial unemployment claims through the period of February-May.

There is no scaling in the above chart, just the numbers of people claiming unemployment insurance on continued basis. Which is telling: in recessions, these rise; in recoveries they fall. You can see that the lowest unemployment claims tend to happen some months before the onset of the subsequent recession. And recoveries take long. Of course, in the 1970s, there were fewer people in the labour force and, therefore, the absolute numbers of the unemployed were also lower.

Which means, it is worth rescaling each episode of rising and falling unemployment claims to the pre-recession levels ('norm') and to the recession peaks, taking into the account how long does it take unemployment claims accumulated during the recession to drop back to the levels of pre-recession claims.

So, methodology. I define 'normal' unemployment claims level as being the lowest level attained in the 12 weeks preceding each recession. This is set as an index of 100 for every recession. We look at the period of 6 weeks prior to the onset of the recession to identify the starting level of recession in terms of unemployment levels (these are weeks -6 through 1 on the X-axis). We then look at subsequent weeks (non-negative values on the X-axis) and plot index of unemployment claims (current unemployment claims normalized to the 'normal' level) through the recession and into the recovery, mapping these until one of the two events occurs:

1. Either the index returns back to 100 - meaning unemployment claims finally are restored to the level of the pre-recession levels or the 'normal'; or
2. In cases where this does not happen, until the onset of the next recession.

First, let us do this for all recessions since 1967 (when the data starts) through the end of 2019 - ignoring for now the COVID19 period.

Lots of interesting stuff in the above.

• 2008-2009 Great Recession was long - longer than any other recession - in terms of labor markets recovery to 'normal' levels of unemployment claims. It was also sharp - second sharpest on record - in terms of the mass of unemployment claims at the peak of the recession. 
• Legacy of the 1990-1991 recession was also painfully long, but shallower on the impact side (peak levels of unemployment claims). 
• Epic 1973-1975 recession was horrific: it had a long lasting impact on unemployment claims and, in fact, it never got the point of returning unemployment claims levels back to the pre-recession 'normal'. 
• We normally think of the 2001 recession as being 'technical' - caused just by the gyrations in the stock markets, aka the dot.com bubble burst. But in reality it too was pretty long in terms of its impact on the unemployed and it was pretty sharp as well.

And so on... but now, time to bring in the COVID19 pandemic. Let us start by just plotting it with the rest of the data. Boom!


The COVID19 pandemic made so many people claim unemployment insurance - on continued basis, not just one-off first time claims that anyone can file - that you can no longer meaningfully consider the rest of the recessions in comparison. In data analysis, we say that COVID19 pandemic is an influential outlier - it distorts our analysis of all other recessions. In this case, it is useful to use logarithmic scale to visualize the data. So here it is:



Stay tuned, I will be updating this chart as we go.

Some updates from the US Labour Markets to our America's Scariest Charts series today.

First, headline official Non-Farm Payrolls data for the month of June 2020 is out today. Here is the visual:

Total Non-Farm Payrolls dropped during the COVID19 pandemic to the crisis-period low of 130,303,000 in April 2020. This marks a drop of 22,160,000 on pre-crisis high - a decline of 14.53%, the sharpest drop on record for any recession. Since then, the payrolls improved in May and again in June. Payrolls rose 2,699,000 in May and by 4,800,000 in June, prompting the White House (and the army of its trolls) to herald an 'unprecedented' 'tremendous' recovery. However:

Summary of comparatives of the current recession to prior recessions:

Now, next in the set of our America's Scariest Charts: initial unemployment claims 9also released today). The table above already shows the latest print for these series - for the week ending June 27, 2020, at 1,445,481 new claims filed. This was virtually unchanged on the revised final estimate for the week ending June 20, 2020 that came in at 1,460,056. New claims have basically stabilized from the week of May 30th through latest. 

The six-months moving sum of all initial unemployment claims filings is now at a massive 47.477,907. This number, of course, are reflective of claims filed. And it does not reflect expired claims or people moving from unemployment to employment. Hence, it is useful in only highlighting the relative magnitude of the current jobs crisis controlling for duration.

Prior to the COVID19 pandemic, there has been only one instance of initial unemployment claims exceeding 1 million count in any given week - during the week of January 9, 1982, when there were 1,073,500 new claims filed. Which means that last week's print - although well below peak COVID19 filings - still stands almost 35% above the worst weekly unemployment claims filing in pre-COVID19 history. 

So here is the overall 'recovery' to-date:

You can call it 'magnificent' or 'tremendous' or you can call it 'ugly'. I guess your perspective will depend on your party affiliations and the membership in the 1% vs 99% clubs.