– WalletHub Study Update

New unemployment claims decreased by 6.6% week-over-week on November 21 amid high inflation and the threat of a recession. To help add some context to these statistics, WalletHub just released updated rankings for the States Where Unemployment Claims Are Decreasing the Most.

 Key Stats:

• Every state had unemployment claims last week that were lower than in the previous week except for Massachusetts, Idaho, Ohio, Vermont, Tennessee, Wisconsin, and Connecticut.

• Surprisingly, 24 states (including Colorado, Ohio, and South Carolina) had unemployment claims last week that were worse than the same week last year.

• Every state had unemployment claims last week that were lower than in the same week pre-pandemic (2019) except for Illinois, Mississippi, Rhode Island, Tennessee, Connecticut, Indiana, Ohio, and Idaho. 

To view the full report and your state’s rank, please visit:
https://wallethub.com/edu/states-unemployment-claims/72730  

WalletHub Q&A

The unemployment rate is now expected to hit 5% next year. What does this mean for the economy?

“The unemployment rate is expected to rise from its current level of 3.7% to about 5% by the end of next year. This shouldn’t be surprising news, since the Fed is taking further steps to damper inflation,” said Jill Gonzalez, WalletHub Analyst. “While higher unemployment is bad for the families affected, it is good news for the economy as a whole in the current inflationary environment because it should eventually lead to a decrease in inflation. The current projections should also lead to a decrease in interest rates in 2024, once inflation has hopefully subsided enough.”

When is unemployment expected to pick up again?

“Unemployment is expected to pick up again following this larger Fed rate hike,” said Jill Gonzalez, WalletHub Analyst. “The chances of a sharp rise in unemployment in the US over the coming year are high. The unemployment rate was expected to average 3.7% this year before rising to 4.4% and 4.8% in 2023 and 2024, respectively. That number has not been reached yet, so we should expect it fairly soon. Once unemployment does start to rise, the Fed should be able to pull back on its aggressive rate increases.”

How would a potential recession affect unemployment?

“A potential recession would negatively affect unemployment significantly. Losing a job is never good, but when you combine it with such high inflation it can really become disastrous,” said Jill Gonzalez, WalletHub Analyst. “Even Americans with jobs right now are struggling to afford essentials like food and gas. If those numbers to climb while more people become unemployed, we might see an economy in deep recession.”

What do you make of the fact that there are more job openings than there are unemployed Americans?

“Unemployment is really no longer an issue since the country has recovered from much of the fallout of the pandemic,” said Jill Gonzalez, WalletHub Analyst. “The next step might be looking to open up immigration to fill the surplus of jobs nationwide. Doing so would not only help businesses meet their needs but would also drive additional economic growth.”

How do red states and blue states compare when it comes to new unemployment claims?

“With an average rank of 22 among the states with the biggest decreases in unemployment claims, red states fared better last week than blue states, which rank 30 on average,” said Jill Gonzalez, WalletHub Analyst. “The lower the number of the ranking, the bigger the decrease in the state’s new unemployment claims was.” 

How has unemployment in the Mountain states – the division with the highest inflation growth in the past 12 months – been impacted?

“Among Mountain states, Wyoming unemployment claims have experienced the 8^th biggest decrease in the U.S. For the week of November 21, Wyoming had 333 new unemployment claims, a 46% decrease from the previous week. On the other hand, unemployment claims in Idaho have experienced a 4% increase for the same period.”