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Sunday,
May 10, 2020 / 11:44 AM / By Fitch Ratings / Header Image Credit: ABC News
Economic implications of the coronavirus pandemic have
been deep and substantial across the US, and state-level unemployment claims
data imply a wide range of effects across states that will drive economic and
revenue trends, says Fitch Ratings. Total unemployment claims filed since the
start of the economic crisis through the week ending May 2 total nearly a fifth
of the entire national labor force.
Individual states are seeing a wide range of claims,
from less than 10% of the labor force to nearly a third seeking unemployment
benefits. The unemployment claims data, particularly initial claims, is
preliminary, subject to revision and affected by various factors including
recent federal changes to eligibility and states' capacity to accept and
process claims. Nevertheless, the data provide a useful and timely insight into
emerging economic trends across states.
The varied state levels experienced to date point to
the uneven effects of the coronavirus and the potential for a wide range of
recovery in employment and economic growth across the states. State differences
in the spread of the outbreak and relaxation of social distancing measures,
along with commercial/industrial mix and other factors, all play a role in the
level of job losses and will bear on how quickly individual states can reverse
those losses.
The chart above compares cumulative initial and
advance initial claims filed since the week ended March 14 as a percentage of
the March 2020 labor force for the US and individual states. Fitch acknowledges
this metric compares numbers developed from different sources and comparability
is not precise, but utilizing this approach across the states yields a useful
perspective on emerging trends.
For the week ending May 7, claims as a percentage
labor force ranged from a high of approximately 33% for the commonwealth of
Kentucky, to a low of approximately 8% for South Dakota. In the week before the
pandemic began taking hold in the US, claims as a percentage of the labor force
were less than 1% for all states. As the coronavirus has spread across the US,
the change in this metric has varied substantially, both over time and across
states. For most states, there is evidence unemployment claims are growing at a
diminishing rate, while for some the more recent data indicates accelerating
claims growth.
The state-level median percentage of workforce
employed in the travel and leisure sector, which is the sector most acutely
affected by the pandemic, is approximately 10%. As of last year, only two
states had more than 15% of its workers employed in this sector, Hawaii with
approximately 20% and Nevada, with nearly 25%. Not surprisingly, Hawaii's
claims as a percentage of its labor force is the second highest among all
states at 32% and Nevada ranks sixth highest at 27%. On the other end of the
spectrum, both Utah and South Dakota report claims as a percentage of labor
force of less than 10%. The national percentage is 19%. Note that this metric,
as calculated, can be substantially higher than other measures of unemployment,
such as the insured unemployment rate from the US Department of Labor or
monthly headline unemployment from the US Bureau of Labor Statistics.
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