Table of Contents: AEG’s Ongoing COVID-19 Analysis
Economic Update, May 7
Multiple states now have “payrolls” in excess of $800 million per week to unemployed workers, dwarfing the national payrolls of many of the largest U.S. corporations
East Lansing/Chicago—Amidst a wave of unprecedented unemployment claims, AEG experts have estimated the value of weekly unemployment benefit payments made to unemployed individuals by state. Estimates show that some states are now pumping nearly $1 billion in weekly payments into their economies through their unemployment insurance programs–a staggering total that dwarfs the weekly payrolls of many private sector businesses. These benefits include a state payment, as well as a $600 weekly federal supplement under the CARES act.
The Anderson Economic Group estimates are based on insured unemployment and claims figures released by the federal government in the last week of April. New unemployment claims figures–to be released today–are almost certain to push the number higher. Multiple states have crushing unemployment as a share of their overall workforce, including Michigan, Pennsylvania, Washington (over 20% in mid-April), as well as New Jersey, Massachusetts, and California, and New York (all over 15%).
“We estimate that the effective ‘payroll’ of state unemployment offices is now in excess of $16 billion per week,” said Anderson Economic Group Principal and CEO Patrick L. Anderson. “States are quickly becoming one of the largest sources of household income in the country. The scale and magnitude of these benefits is changing the way Americans view work during this coronavirus depression.”
AEG experts estimate that the average weekly unemployment insurance check is nearly $1,000 per claimant, consisting of $370 in state payments plus an additional $600 from the federal government. With 20 million unemployed Americans, and over 17 million among the “insured unemployed,” total weekly payments to workers are roughly $16.7 billion.
Research by Anderson Economic Group economists Brian Peterson and Andrew Miller show that:
- A number of states are sending out over $800 million dollars in benefits per week. This includes Michigan ($840 million), Pennsylvania ($910 million), Texas ($970 million), New York ($1.6 billion), and California ($1.7 billion).
- Average state payments will likely climb higher in upcoming weeks as the epidemic continues and firms begin to cut managerial positions that remained intact during the initial weeks of the downturn.
- Even states that did not issue a “stay at home” order are feeling the impacts of the economic downturn. Both Iowa and Oklahoma distributed over $100 million in benefits to unemployed individuals last week.
Figure 1 Estimated Value of Weekly Unemployment Insurance Payments as of May 6, 2020 (click to enlarge)
This analysis was completed by the same team that accurately predicted—in mid-March—the enormous number of unemployed that would be counted in April.
Regional Update, May 4
May 4, 2020—East Lansing, Michigan—Today’s updated data from Anderson Economic Group includes regional analyses for Illinois, Indiana, Michigan, and Ohio. Since early February, AEG has released regular updates to inform citizens using the best information available.
In addition to analyzing these states overall, AEG is providing regional analyses for metro Chicago in Illinois, metro Fort Wayne in Indiana, and for several Michigan counties and metro areas. As with prior analyses from Anderson Economic Group, these results are based on fully disclosed data sources, a written methodology, and a clear statement of known limitations in both the data and the models used.
“Overall, we are continuing to see a downward trend in the first wave of COVID-19 in the Midwest,” said Brian Peterson, Anderson Economic Group’s director of public policy and economic analysis. “Knowing where we are in terms of new cases and what could happen in the future is a critical first step toward easing stay at home restrictions and reopening portions of the economy. The pandemic is still a major concern, but our data and forecasts suggest that things are beginning to turn around.”
Summary of Illinois Analysis (see charts for detail)
Over the last week, Illinois experienced several days of new highs in daily reported cases for the first wave of the COVID-19 epidemic. Nevertheless, we expect to begin seeing a downward trend in cases in the coming weeks as the infection rate across the state has slowed. Trends are similar in Chicago, which has roughly two-thirds of Illinois’ confirmed cases.
Summary of Indiana Analysis (see charts for detail)
In Indiana, modeled cases in the first wave of COVID-19 peaked in mid to late April. Our analysts expect they will continue to trend downward through the coming weeks.
Summary of Michigan Analysis (see charts for detail)
Once again, we see a downward trend in new cases throughout most areas of Michigan for the current wave of the pandemic. As noted in mid-April, Michigan’s western region (including the Grand Rapids metro area) continues to be a potential area of concern.
Summary of Ohio Analysis (see charts for detail)
Signs point to a clear downward trend in cases in Ohio. The state experienced its peak new case count in mid-April, and it has since seen much lower numbers reported.
Modeling of the Covid-19 Pandemic
Since February, Anderson Economic Group LLC, together with the data analytics firm Supported Intelligence, has been gathering data from multiple countries and U.S. states to model the path of the COVID-19 pandemic. We identified the situation as a crisis as early as our February 10, 2020 release, and began releasing selected regional analyses in late March. We follow these practices in our work:
- We use a standard model for infectious disease analysis.
- We employ a standard “S-I-R” (Susceptible-Infections-Recovered) model, which has over 50 years of widespread use and published results.
- We compare results across multiple states and countries.
- We show the actual data.
- We focus on a tangible concept: the number of people cases with the disease.
- We show uncertainty, units, dates, and past prediction errors.
- We use data compiled by the New York Times for most of the United States, and World-o-Meter for much of the rest of the world.
- We describe our methodology, data sources, and limitations.
Note that data for every area continues to be updated and revised; therefore, our projections and analysis will change over time.
This analysis was prepared by Anderson Economic Group economists Brian Peterson and Patrick Anderson.