A record 3.28 million initial unemployment claims were filed for the week ending March 21. This surge in new filings occurred too late to be included in the March employment report (scheduled for April 3). So this 3.28 million in claims for the week of March 21 and those of upcoming weeks will appear in the April employment report, scheduled for release on May 8th.
The monthly survey for employment is based on payroll data gathered from businesses, which includes the 12th of the month. A typical payroll survey week runs from Sunday through Saturday. This year April 12 falls on a Sunday, and the payroll week for the April employment report will run from the 12th to the 18th, Sunday to Saturday.
Politicians are now given more than three weeks to take action and mitigate the optics of the dire jobless claims data for the April employment report.
A senior official at the Bureau of Labor Statistics (BLS) said a person is counted employed if he or she received pay for part of the reference pay period. A person is employed if he or she is paid for one hour, one day, or any part of the payroll week. But the employer must pay the worker.
This is key. The $2 trillion financial aid package provides guaranteed loans to businesses that pledge not to lay off workers. So if this part of the financial aid package is operational by mid-April some of the 3.28 million workers could be reinstated as employed even if they remain idle.
It is far too early to know what impact the virus will have on the economy in the days and weeks ahead. But if the federal government relaxes its guidelines, encouraging parts of the economy to reopen by “April 12”, the ultimate decision still rests with the states.
April 12 is most likely too soon for areas with high density and relatively large number of cases to think about making policy changes. Yet, relaxing restrictions in areas with low cases and the aid from the stimulus package will enable some business to refrain from layoffs while encouraging others to rehire workers.
Politicians are trying to buy some time to limit the rise in the number of jobless, but the best way to ensure these initial claims are short-term losses and not longer term permanent job losses is to focus on public health.