Unemployment Rates Are Headed in the Right Direction

The unemployment rate in the U.S. reached 14.7% in April, declined to 13.3% in May, and fell further to 11.1% in June.  While the trend is in the right direction, the June rate is still higher than the peak monthly rates in all of the post-war recessions. As the Great Recession waned, the national rate reached 10% in October 2009, and it reached 10.8% in December 1982, the previous post-war high.

The map below presents the state level unemployment rates for June that were released today.  Massachusetts had the highest rate at 17.4% and Kentucky had the lowest rate of only 4.3%. In May, Kentucky’s rate had been 10.9%. Other states recorded sizable declines as well. Nevada’s June rate of 15%, while the fourth highest nationwide, fell from 25.3% in May. New Jersey had the second highest rate at 16.6% and New York had the third highest rate at 15.7%.

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The next figure tracks the unemployment rates in the five most populated states for the first six months of 2020. The rate in Texas rose to 13.5% in April, fell to 13.0% in May and then fell an additional 4.4 percentage points to its June rate of 8.6%. Texas had the lowest June unemployment rate among the five most populous states. New York led these states in June with the highest rate of 15.7%. This rate was higher than New York’s May rate of 14.5%. California had the second highest rate in June at 14.9%, a decline from its rate of 16.4% in April and in May. The unemployment rates in Pennsylvania and Florida declined each month following their April highs.

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The outlook in Texas for July is not starting off as well as in June. Consider the next figure which depicts weekly initial unemployment insurance claims in Texas. During the first two weeks of July, claims averaged 111,345 or 20% higher than the average over the first weeks of June. The June unemployment rates both nationally and in Texas are trending in the right direction, but for that trend to continue in Texas, we’ll need some improvement over the next two weeks.

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Posted: July 17, 2020 by Andrew J. Rettenmaier