New Data Hints at Parts of Economy Hit Worst by Unemployment

Unemployment will hit government in many ways. Federal data on unemployment insurance claims can show which industries have suffered most, but right now the reports can only provide a sneak preview of what's happening.

With the coronavirus pandemic prompting most Americans to hole up in their homes, unemployment insurance claims have been skyrocketing.

But which parts of the economy are being hit the hardest? And how will it affect government?

The U.S. Department of Labor recently put out monthly numbers that provide something of a hint — but because of how the data are collected, the picture won’t become entirely clear until the next report comes out in the latter half of May.

The most recent report, which provides a snapshot into one week of unemployment in the first half of March, shows the largest year-over-year increases in accommodation and food services, mining and education. The month-over-month increases were generally smaller and generally in the same industries, except mining.

Claims from the public sector were mostly flat, with small increases compared with other categories.

Overall, UI claims rose 9% month-over-month and 12 percent year-over-year. That number reflects a “continued claim,” which is when a person has met basic eligibility requirements in their state and been unemployed for at least a week. 

Here are the percentage shifts by industry:

The problem is that UI claims really spiked in the latter half of March, so the industry numbers shown here provide a picture of what things looked like just before the economy was upended later in the month. April’s report should reflect much larger changes.

The numbers will bear importance for state and local governments based on which industries make up large portions of their economies, as well as the ones that provide revenue. A recent survey of local government officials found that most were expecting large drops in revenue this year, and they mostly expected that those shortages would come from permit and service fees.

Since government budgets and contracts tend to run for relatively long periods of time, it’s very possible that economic disruption from the pandemic will take a while to show up in data such as government spending and unemployment claims from public-sector workers.

Check back next month for a report on April's numbers.

Ben Miller is the associate editor of data and business for Government Technology. His reporting experience includes breaking news, business, community features and technical subjects. He holds a Bachelor’s degree in journalism from the Reynolds School of Journalism at the University of Nevada, Reno, and lives in Sacramento, Calif.
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