By. Neil Williamson, President
The good news, the worst COVID related unemployment may be behind us. The bad news, it will be a long road to recovery.
As we prepare to enter in to Phase II of COVID-19 Recovery (6/5), the Virginia Employment Commission (VEC) is releasing unemployment data that may illuminate the employment (and economic) impact the virus and (subsequent business restrictions).
Using two different data sets, April unemployment and weekly unemployment claims, we seek to inform the local COVID-19 economic impact discussion and provide empirical data to further the community conversation.
On May 22, VEC released the April unemployment numbers.
Virginia’s seasonally adjusted unemployment rate rose 7.3 percentage points in April to 10.6 percent, which is 7.7 percentage points above the rate from a year ago. According to household survey data in April, the labor force contracted by 141,611, or 3.2 percent, to 4,297,739, as the number of unemployed residents rose by 308,629. The number of employed residents decreased by 450,240 to 3,843,816. Virginia’s seasonally adjusted unemployment rate continues to be below the national rate, which rose to 14.7 percent.
Using VEC data, The Free Enterprise Forum drilled down to compare unemployment numbers for April 2019 to April 2020 by Central Virginia locality.
Economists actively monitor VEC’s weekly unemployment insurance claims. Under Unemployment Insurance reportage, there are two distinct economic indicators: initial claims (the first time a worker applies for unemployment) and Continued Claims (a previous recipient who continues to receive unemployment insurance benefits).
Initial Unemployment Claims
The week ending May 23, 2020 numbers indicate on a statewide basis initial unemployment claims are trending downward and continuing claims are leveling off.
The Free Enterprise Forum analysis of the more granular, locality data parallels the statewide trend and indicates shows the week of April 4th was the peak of initial unemployment claims. Albemarle led the peak with 1,429 initial claims that week.
Continuing Unemployment Claims
Looking deeper into the number of potential workers continuing to access unemployment insurance, the local curve seems to be trending toward a flattening point with the week of May 23, 2020 data.
The Free Enterprise Forum believes the most recent unemployment numbers indicate we may be close to the end of the beginning of the COVID Economic impact story. As the state moves into Phase II of recovery, we hope to see more workers able to safely return to work.
While our community is resilient, we believe it will be some time before we return to April 2019 levels (~2%) of unemployment.
Neil Williamson, President
Neil Williamson is the President of The Free Enterprise Forum, a privately funded non partisan public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and Nelson County. For more information visit the website www.freeenterpriseforum.org