US Jobless Claims Tumbled Last Week After Fraud-Inflated Jump

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2. Fraud in Massachusetts is boosting US weekly jobless claims, economists say

Last edited Thu May 18, 2023, 11:14 AM - Edit history (1)

Macro Matters

3 minute read • May 17, 2023• 2:24 PM EDT• Last Updated 20 hours ago

Fraud in Massachusetts is boosting US weekly jobless claims, economists say

Reuters

WASHINGTON, May 17 (Reuters) - Fraudulent filings for state unemployment insurance aid in Massachusetts could be distorting U.S. weekly unemployment claims data, economists warned on Wednesday, making it harder to get a clear picture of the labor market in the short-term. ... A surge in applications in Massachusetts accounted for the increase in initial claims for unemployment benefits during the week ending May 6, which drove them to the highest level since Oct. 30, 2021.

"We find that Massachusetts accounts for nearly all of the recent shift up in the pace of weekly jobless claims reported nationally," JPMorgan said in a note, citing its analysis of the weekly claims data. "Moreover, across the remaining 49 states we do not see signs of an unusual rise in claims recently, suggesting the issue of significant fraud is fairly limited to date."

The Massachusetts Department of Unemployment Assistance, since the release of the claims data last Thursday, has acknowledged that it "is experiencing an increase in fraudulent claim activities where people attempt to gain access to active UI (unemployment insurance) accounts or file new UI claims using stolen personal information so they can fraudulently obtain unemployment benefits."

According to JPMorgan's analysis of the weekly claims data, the unusual rise in claims from Massachusetts might have started earlier than the week ending May 6.

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