If you’ve visited this blog before, you may have come across the official definition of unemployed: One needs to be currently looking for work, ready to work, and willing to work.
There are also requirements for receiving unemployment insurance benefits (e.g., previous work, waiting periods, eligibility periods, and asset tests) that vary across time periods and states. Plus, specific circumstances may affect benefits: How did you lose your job? Did you work sufficiently long before unemployment? Did you wait long enough before making your claim? Has your eligibility expired?
Given all these criteria and the time it takes to process a claim, there should be more unemployed persons overall than persons currently receiving unemployment insurance benefits. But the FRED graph above shows that the impossible has happened: More people are receiving benefits than are unemployed. What gives?
The specifics of the CARES Act allow people to receive benefits so that they do not have to report to work if their health conditions make it too dangerous. In such cases, the beneficiary is not technically unemployed, as there is no active job search going on. But benefits are still received through the unemployment insurance program of the person’s respective state.
How this graph was created: Search for and select the “continued claims” series. From the “Edit Graph” panel, use the “Add Line” tab to search for and select the “unemployment level” series; then apply formula a*1000 to get the same units. Finally, restrict the sample period to highlight the discussed episode.
Suggested by Christian Zimmermann.