Nearly 3.4 million initial unemployment claims have been filed in Texas since the pandemic put the squeeze on the economy in March. Today, our unemployment figures reflect the state’s continuing struggle to emerge from the recession.
According to the U.S. Department of Labor, 61,416 Texans filed initial claims in the week ending Aug. 15, 2020, slightly more than in the previous week but considerably better than the figures reported in July (Exhibit 1). Initial claims also have been falling in the nation as a whole. Even so, the number of claims remains well above levels seen in the Great Recession of 2007 through 2009.
Exhibit 1: Initial Unemployment Claims in Texas
Source: U.S. Department of Labor, Employment and Training Administration
The number of Texans receiving unemployment insurance (UI) benefits, called “continued claims,” hovered between about 1.2 million and 1.3 million from the middle of May through early August (Exhibit 2). The state’s insured unemployment rate — continued claims as a share of covered employment — was 8.9 percent for the week ending on Aug. 8, 2020, versus 9.7 percent nationally. (Covered employment includes jobs subject to state or federal UI programs. They account for about 95 percent of all jobs; the numbers reported here are not seasonally adjusted.)
Exhibit 2: Continued Claims and Insured Unemployment Rate in Texas
Note: Continued claims represent Texans receiving unemployment benefits.
Source: U.S. Department of Labor, Employment and Training Administration
Texas’ monthly unemployment rate fell to 8.0 percent in July 2020, down from 8.4 percent in June and 13 percent in May, but still well above February’s 3.5 percent, the last month before the recession took hold. The national rate in July was 10.2 percent (Exhibit 3).
Exhibit 3: Monthly Unemployment Rates in U.S. and Texas, 2020
Source: Texas Workforce Commission
To help meet Texans’ need for unemployment checks, in June the Texas Workforce Commission (TWC) began drawing federal advances under Title XII of the Social Security Act to replenish its Unemployment Compensation Trust Fund. TWC drew down $977 million in June and nearly $1.7 billion in July. As of early August, the agency estimated it would again draw close to the July total. These federal loans are available without interest through December.
The maximum weekly state UI benefit in Texas is $521. The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, among its other provisions, funded additional federal benefits of $600 a week that expired in July. In August, the federal government approved additional benefits of $300 a week following an executive order signed by President Trump.
TWC has taken a number of actions in response to the wave of claims, including the temporary suspension of the work-search requirement for job seekers. Plans to reinstate the requirement were paused at the end of June due to a resurgence in COVID-19 cases.
About a thousand TWC employees were fielding claims in early March; the number working on claims rose to nearly 3,000 by early August. The agency also maintained extended operating hours for its call centers and ramped up its web-based system.
TWC won’t draw any conclusions about whether the recent drop in initial claims says anything about the economy.
“The nature of the COVID-19 pandemic makes speculation impossible at this time,” says James Bernsen, TWC’s deputy communications director. FN
Texas employment and unemployment statistics are reported in the Comptroller’s Key Economic Indicators.
