Next Week: Unemployment Claims -- Should Be Very, Very Interesting -- So Much For The Recovery

Next week we will get a clue to the integrity of the weekly first time claims for unemployment benefits. The weekly number has pretty much been in a "range" of 3,000 to 5,000 up or down in any given week.

On Tuesday of this week, it was reported that 800,000 government workers were furloughed. Now it is being reported that these employees have begun filing for unemployment claims.

Federal workers who are furloughed because of the government shutdown began filing for unemployment benefits almost immediately this week, uncertain about when they would be able to return to work.

Employment agencies in the District of Columbia and Maryland said Wednesday that they have already seen an increase in online applications for benefits. Virginia is requiring federal workers to fill out a special paper application to mail to Richmond.

That last statement is interesting: "a special paper application." I assume this means that the federal government and the state governments are already trying to massage the data for next week. I can already see the headline: initial claims drop, pointing to a recovering labor market. Then, deep in the story, we will read that first time claims took a huge jump but that it was due to a one-off, the government shut-down. They really don't want to include the government shut-down numbers, but one can't have it both ways.

This will be very, very interesting. The weekly numbers move up and down about 3,000 to 5,000. Earlier this week, 800,000 government workers were furloughed. Next week we start to see the trickle down effect as government contractors start laying off workers. Then the following week, the trickle down effect as tertiary operations -- the restaurants and retailer that cater to government and contract employees -- start to lay off employees. 

By the way, the article gets even more interesting:

Maryland’s Department of Labor received 4,000 unemployment claims from federal workers Tuesday — more than the state usually receives all year from federal workers, said spokeswoman Maureen O’Connor. Another 2,000 applications arrived Wednesday from federal workers.

In Virginia, all federal workers will have to submit paper applications because the Virginia Employment Commission can’t access federal workers’ wage information the same way as other employers, said spokeswoman Joyce Fogg. But workers employed by federal contractors can apply online.

Eligibility for unemployment benefits during a temporary layoff or furlough depends on the worker’s earnings.

“If they receive unemployment benefits and are then paid retroactively, they would have to pay back what they received in unemployment benefits,” Fogg said.