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Thursday, April 2, 2020

How bad is it? Bad, really bad - Part 4

Another off-the-chart leap in new claims for unemployment insurance has occurred in the week ending March 28: 6.6 million on a seasonally-adjusted basis, 5.8 million not seasonally-adjusted for the U.S. as a whole. Note that a) many people reportedly have not been able to register with the overloaded offices that process such claims, and b) even those who were processed will experience longer-that-usual delays in actually receiving cash from the system.

California accounted for 15% of the new claims (not seasonally-adjusted), 878,727 is the official preliminary number. The cost of providing unemployment benefits does not come from the state's General Fund. However, the state has to be spending lots of money related to the coronavirus crisis. It has deferred the income tax due date from April to July. So the only people who will file are those who expect a refund. April is typically a big cash inflow month for the state but now that situation has reversed. The next cash statement from the state controller will come out on April 10, but it will cover only through March. It won't be until May 10 that we will have data for the state's cash situation through April. The next meeting of the full Board of Regents will also occur in mid-May. There will be Bad News, whatever the details.

The latest new unemployment claims data release is at:
https://www.dol.gov/ui/data.pdf

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