Unemployment insurance claims low, but break recent downward trend

Strong hiring demand and ever-tightening labor markets have been a remarkable antidote for once-high unemployment insurance claims. But with final 2019 numbers now in, it appears that unemployment insurance (UI) claims may be touching bottom, or have at least paused after seeing persistent annual declines.

Since the end of the Great Recession, initial unemployment insurance claims across Ninth District states have seen a steady decrease. From 2015 to 2018, annual initial claims fell by 26 percent, or almost 200,000 claims. But in 2019, total initial unemployment claims rose by 2 percent over 2018; each district state also saw a similarly slight uptick in 2019 versus 2018 claims, despite varying levels of eligibility and generosity in UI programs (Chart 1).

For example, Wisconsin’s economy is roughly seven times the size of South Dakota’s. But the Badger state sees roughly 50 times the number of UI initial claims, give or take, in a typical year. Yet both are on the same trend line in terms of annual claims.

The same trends are holding true for continuing UI claims, which represent individuals receiving weekly UI payments. During the summer of 2018, cumulative weekly continuing claims among five district states were routinely 30 percent lower than summer levels seen in 2015. However, in 2019, the improvements stopped, with continuing claims closely mirroring levels seen the previous year (Chart 2).