Claims by gig workers under federal PUA program soar, now 44% of total unemployment claims. Where’s the “V-Shaped” recovery of the labor market?
By Wolf Richter for WOLF STREET.
The data chaos persists, and the unemployment numbers keep getting worse. The torrent of newly unemployed keeps flowing week after week. But a lot of people are also going back to work. The total number of people who continued to claim unemployment compensation in the week ended July 4 under all state and federal unemployment insurance programs, including gig workers, jumped by 1.41 million people, to 32.92 million (not seasonally adjusted), the Department of Labor reported this morning. It was the highest and most gut-wrenching level ever.
The number of people who continue to receive state unemployment insurance (blue columns) has been ticking down, as more people got their jobs back than newly unemployed flooded the state unemployment systems. But the number of people claiming federal unemployment insurance, including gig workers under the Pandemic Unemployment Assistance (PUA) program, continues to surge (red columns), which causes the total number of people claiming unemployment benefits under all programs to rise:
Unemployment insurance under state programs.
The number of people who were newly laid off and filed their initial unemployment claims with state unemployment offices in the week ended July 4 ticked down to 1.4 million (not seasonally adjusted). This is still a huge number of people filing new unemployment claims – and nearly twice the peak of the unemployment crisis in 2009 – but it’s the lowest number since this crisis erupted.
Those declines in initial claims have been painfully slow over the past four weeks. Over those four weeks combined, 5.75 million newly-laid-off people filed initial unemployment claims. The chart represents the weekly inflow of newly unemployed under state programs into the masses of the unemployed:
But millions of people who had been on state unemployment insurance got their jobs back, and this includes some workers at retail stores, restaurants, bars, hotels, but also in construction and other activities.
This outflow of people coming off the state unemployment rolls has been higher than the weekly inflow, and as a result, those continuing to receive unemployment insurance, the “insured unemployed,” under state programs fell to 16.8 million. Though still a gigantic number, it was the lowest since mid-April (blue columns in the first chart above).
Unemployment insurance under federal programs.
Pandemic Unemployment Assistance (PUA), which covers gig workers: 1.04 million initial claims were processed by 49 states in the week ending July 4. This represents the weekly inflow into the mass of gig workers claiming benefits under this program.
One state – New Hampshire – has still not figured out how to process these federal PUA claims and continues to stiff its gig workers. But this is a big improvement over last week, when three states still hadn’t processed any PUA claims. Georgia and West Virginia finally started processing claims this week. Florida started processing PUA claims last week.
The mass of gig workers that continue to claim benefits under the PUA program jumped by 1.5 million from a week earlier, to 14.36 million. This is a huge number and shows just how hard gig workers have been hit and how important they are in the labor market. These gig workers include everyone from Uber drivers to coders working on a contract basis, who ran out of work.
Gig workers claiming continued benefits under PUA now account for 44% of all people on state and federal unemployment rolls. At this rate of progression, in a few weeks, they may be over half of all continued unemployment claims.
Pandemic Emergency Unemployment Compensation (PEUC), for those who have exhausted all rights to regular state and federal unemployment insurance: The number of people who continue to claim benefits rose to 850,461. But 11 states still have not yet processed any claims under the PEUC program, including Florida.
Other federal unemployment programs: Continued claims by federal employees remained roughly stable at 14,482; and continued claims by newly discharged veterans rose to 13,107.
These unemployed under all federal programs combined, and under some other programs, are shown by the red columns in the first chart above.
Data Chaos persists.
No government agency, neither at the state nor at the federal level, was ready for this type of unemployment crisis when it suddenly erupted in mid-March. The result has been chaos in processing unemployment claims and then in paying people their unemployment benefits.
There have been countless claims for months that unemployment offices around the country were having trouble even processing initial unemployment claims under state programs.
And the claims by gig workers under the federal PUA program were complex to implement at the state level, and states dragged their feet implementing them. As states are catching up with processing the claims, the numbers keep rising. We don’t know whether the surge in gig workers claiming benefits under the PUA program is from more gig workers losing work, or from states catching up with the claims, or from a mix of both.
And actually paying claims has fallen way behind too. This is happening around the country to varying degrees. For example, according to government data cited by the Mercury News yesterday, by the end of May, California had started paying benefits to 3.13 million unemployed but still hadn’t paid 1.88 million unemployed, though it had processed their claims. The state may have caught up some by now.
There has been chaos everywhere. States are still behind processing claims. Some claims that have been processed were fraudulent, according to reports. There may be duplication and other issues. And data chaos has made the separate monthly jobs report by a different agency, the Bureau of Labor Statistics, a useless mess. But one thing we know: This unemployment crisis is dragging out. And there is no V-shaped recovery at the moment.
At stake are a dozen major clothing brands, thousands of stores, and many thousands of employees, after years of struggling, while work-from-home is annihilating casual and formal office attire. Read… Pandemic Compresses Brick & Mortar Meltdown: Brooks Brothers Files for Bankruptcy, Ascena (Ann Taylor, etc.) Prepares to File, Tailored Brands (Men’s Wearhouse, etc.) Not Far Behind
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There is no good logical evidence for a V shaped recovery in jobs, just because a few waitresses and bartenders can go back to work. As the corona induced economic collapse ripples through the economy more and more jobs are pulled in to the vortex. We are now getting in to the second and third tier of job losses, with the white collar folks at the headquarters building of the B&M chains getting laid off. The staff and faculties of major universities getting furlowed, and the accountants and lawyers and IT staff who service the big hotel groups, and retailers sucking wind. There are not really any safe jobs except maybe for Amazon execs and Pulmonologists.
Seneca, here’s your recovery:
\_________/
“A goldpan shaped recovery”
Looks like a goldpan, used to separate gold from sand in a stream.
What the civic, financial, educational and business world at the other end will look like is unknowable.
Bedpan shaped recovery. The bottom is full of sh*tty times.
Wisdom Seeker
Spot on! Except that if you are a One Percenter the bedpan is made of gold and has diamonds embedded along the rim. Still full of shit though—.
The only ones who believe in a V shaped recovery in jobs are those who indulge in wishful thinking.
What was broken here isn’t going to get fixed. Not when the pandemic isn’t under control, and the governments and the media are putting out daily statistics about the number of infected and its rise without any context. They may as well be saying it’s the zombie apocalypse, step outside and you die. Ironically, the institutions have become more and more broken the last decade, that even if context is given to everything, a good number of people aren’t going to listen. And consequently, we end up getting more infection which then feeds the media fear machine some more. It’s a perpetual down spiral.
If we looked at this economy like tranches of CLOs; basically, the lower levels have just been wiped out. The ones on top think they are safe, but they really aren’t, because it’s like having the foundation of your house blown apart. The rest is going to come tumbling down.
i like your analogy of the us economy made up of tranches like a CLO/CDO;
the gig workers and low wage small and mid-size retailers already got hit;
looking at the upcoming layoffs, united, wells, other corporates with actual employees – whatever that means these days – it looks like mezzanine is about to get hit next.
now do the same trick with the us economy, but this time with CDS.
if youre in the top tranches of this economy, youre sucking payments off of the rest of the plebs with rentier schemes and platform neo-feudal parasitism;
now youre seeing those payments dry up and youre worried about your wage slaves defaulting;
so how would you take out a CDS to offset or swap that risk, and with whom?
How do you buy a “bespoke tranche opportunity”(BTO) against plebs defaulting?
how do you still get paid as everyone else gets smoked, ’cause for damn sure, if youre in the top 10% you.will.not.take.any.losses.
Michels’ law of oligarchy aka, the power vertical aka, Plutarchy.
Agree 100%. Also “platform neo-feudal parasitism” – I’d buy that mug
Watch the price of gold, it’s the safe haven investment when everything else, even the basic dollar-in-the-bank, is suspect.
print the t-shirt i ll buy a couple
after i get my stimulus check
If “platform neo-feudal parasitism” drys up for the rentiers, who is gonna buy houses in the SoCal beach towns where prices never go down?
Wishful think is that like magical thinking? John Adams said to the Congress in 1776, that God rewards strength, but doesn’t give it. So are the people willing to do what is necessary to control of our politics and force the changes that need to made.? Yes, and things will still be very hard, but we live. No. Then that’s it’s extinction. It’s never been more clear.
Work is so passé.
Crush Capitalism.
I fear this gig worker area is ripe with fraud. I wonder if they are required to provide any proof of income.
44% of unemployment benefits going to gig workers does not pass the smell test.
Given the government just doled out millions to wealthy hedge fund partners who claimed paycheck protection grants, when their businesses did not suffer as a result of COVID-19, I expect there is rampant fraud in all these programs.
This is why many people want small government.
Yes the program has fraud and so does incentivizing COVID-19 diagnoses via Medicare payments. Both corrupt and make fighting the pandemic and its consequences more difficult.
Luckily the swamp has been drained and we have a law and order type in charge.
Ha! Yeah we can count on all those golf course deals to set things right…
It’s not just the gig worker. The PPP program is equally smelly.
I want small everything. Small government, small companies. Power corrupts.
wework, vaporware, FASB157, mark to model, fomo pomo, btfd, “community-adjusted” EBIDTA GAAP,
consider that the average number of NON-GAAP measures used in filings by companies in the $SPX has gone from 2.5 to 7.5 in the past 20 years, according to pwc(HA!)
In credit agreements the definition of EBITDA, earnings before interest, taxes, depreciation and amortisation, ranges from 75 words to over 2,200!
To wit, NON-GAAP profits are on average 15% higher than GAAP profits! (just ask SoftBank).
consider arthur anderson the big accounting firm that went bust after enron. The people running that shop didnt just go away; they went and formed the group now called ‘Anderson’ and they ditched being a CPA and signing off on fiduciary verbiage and laws; now their entire portfolio is basically dedicated to tax fraud.
In essence theyre another mossack fonseca, except everything they do is apparently legal.
They figured, why put our necks on the line with this accountancy stuff when what we really want to do is help people hide and launder their money.
today anderson is as big if not bigger than arthur anderson ever was.
You need to join Grover Norquist’s organization, Americans for Tax Reform which has a long record of railing against federal government aid.
They received between $150K and $300K so I’m sure you won’t need to pay any dues.
Oh yes, that guy is the chief advocate of taxing people’s taxes. I’m so glad after years of sacrifice and hard work to save for a down payment on a home for my family, boy Grover and those Republicans really stuck it to us good. I figured since state and local taxes had not been taxed by the federal government in the 200+ years of our countries history, the Donald Trump Republicans fluff the courage to dig into our pockets and find some stat and local taxes they could tax again in order to find $300B over 10 years to pay for the corporate Tax cuts! Yes, what a guy, that Grover. Tax the taxes of middle class families to pay for a corporate tax cut. Nice!
re fraud:
how could we forget the pentagon..
more Fraud at the pentagon, than the entire 50 years of the cold war (7 trillion), developing nuclear weapons from scratch (trillions), Korean war (2 trillion), vietnam (4 trillion), Apollo program (2 trllion), 35 years+ of iraq war (5 trillion) and 20+ years afpak war on terror(4 trillion): COMBINED.
fraud and looting IS the american ‘capitalist’ business model; has been since nixon.
try adding up all the frauds since the dotcom bubble of 2000, like pets.com, add enron, arthuranderson, pricewaterscoopers, MCI Worldcom, the ratings agencies, the money center banks, the derivatives, bernie madoff, fannie/freddie, lehman, mfglobal, panama papers, 1MDB, Fat Leonard, juicero, driverless cars, AI panacea, theranos, wirecard, AIG, countrywide, on and on….add it all up and you have TRILLIONS of dollars in fraud in just 20 years!
The top 10% of this country represented by top money center banks, fortune1000 corporations, top law firms like covington, shearson, all top accounting firms, all the business schools and elite universities, and consult shops, have largely done nothing but loot this country for the past 20 years.
in just 20 years, the amount of fraud in the US system has seen thermonuclear exponential growth VS the same time period that came before it; or for any time period in US history!
You have the family of the current head of the securities and exchange commission, Jay Clayton, his family was caught in the panama papers using companies registered in the state of Delaware to form hundreds of shell companies working with mossack fonseca for the purposes of tax evasion, tax fraud and money laundering.
That’s the head of the SEC!
Consider that right now JPM-Chase is under RICO indictments;
the FIRST and ONLY bank in US history to get hit with racketeering charges, which when you consider the history of banking in the USA is quite a feat! (BCCI? Deutsche banc? CITI?)
so yeah I guess you should be worried about fraud in the unemployment checks going out…
Late stage….looting.
IBG YBG
Since Nixon? Truman…
yeah for sure, i mean looting by elites goes back to the dawn of man right? but to my mind, in the past 20 years, fraud and looting, the private equity model, plus the executive compensation model of eps and quarterly earnings is basically a looting model, what bill black calls Control Fraud.
and even though there have been big loses relatively in frauds and looting per se before -like the S&L scandal of the 1980s- the sheer prevalence of looting, and fraud is what strikes me as totally apparent in the last 20 years, since the dotcom bust.
it really started with the garn-stgermain bill, it came from texas, the land fraud and combined with finance through the oil guys.
but, everything is financialized. everything leads to wall street. if you want access to capital markets you have to play their game.
which is loot for the c-suite.
the us economy is one giant private equity scam.
90% of all stocks are owned by top 10% of all income earners by household.
japan had bridges to nowhere before china had ghost cities.
also i justhave to say this, elites for some reason loovvve truman, i fkng hate hs azz
OMy I am terribly impressed. I think you must be right. But I have a stupid question. Since JPM-Chase is the biggest gorilla on the planet, how could they have been indicted?
i dont know but getting indited doesnt mean a guilty verdict; they will plead no contest and pay a fine, nobody will go to jail.
bill barr the specialist sweeper for the elites(see iran contra, see epstein) just tried to put in the current head of the SEC at the SDNY where he would have over seen the RICO case against JPM-Chase and the 1MDB case against Goldman Sachs AND we found out last month also JPM-Chase.
the only problem with that is that Jay clayton worked as a partner for 20 years at sullivan&cromwell who is defense counsel in the 1MDB case. conflict of interest much? He would also know shearman and paul weiss lawyers repping other defendants in those cases.
This is a guy, jay clyaton, whose family was caught in the panama papers setting up hundreds of shell companies for tax evasion, tax fraud and money laundering for the best people, like human traffickers, the sinaloa cartel, russian oligarchs, other dignitaries looting their own companies and or countries etc.
https://www.thenation.com/article/archive/trumps-sec-nominee-has-a-major-conflict-of-interest-problem/
makes sense to me; the estimated percentage of US workers participating in the gig economy is expected to be above 43% in 2020;
and
Over one-third of US workers (36%) or 57 Million workers participate in the gig economy, either through their primary or secondary jobs;
Almost half of all millennials use online gig economy platforms to find work;
The total freelancing income is almost $1 trillion;
57% of contracting workers work more than 40 hours per week;
gig economy in all wage classes not just drivers: highest paying jobs for freelancers are in the fields of AI and Blockchain;
It is projected that by 2023, more than half (52%) of the US workforce will either be gig economy workers;
74.6% of all contingent workers are white;
More than half of gig workers don’t have access to employer-provided benefits (54%);
most US gig workers are hired in the government/public sector (14%);
There are approximately 170 gig economy companies in the United States that only hire remote workers;
73% of Gen Z freelancers have engaged in the gig economy by choice, compared to 66% of baby boomers and only 64% of millennials;
90% of America’s freelancers wish education prepared them better for gig work with 78% of respondents agreeing that soft skills are equally important for success as technical skills;
given the prevalence of people across all age demos pushed into shitty jobs in this rentier neo-feudal so called ‘gig’ eCONnomy, I dont think it is a stretch that 44% of all unemployment benefits are going to gig workers.
this is why people should want and should fight for unions representation.
“More than half of gig workers don’t have access to employer-provided benefits”
Ergo, gig-economy workers. USA and Europe (and probably elsewhere). Works great, if you’re an employer. Not so much for the ’employee.’ A way to cut costs and increase profits.
post-fordist hell
Pie-O-My,
I’ll add to that, alot of young people would prefer a 9 to 5 job like their parents did, that paid as well. But, that isn’t available for an increasingly large number of them, instead, gig work promises higher pay per hour and certain perks, but, doesn’t exactly always deliver. They weren’t likely to get benefits at their other possible jobs anyways.
There are a lot of industries where most new workers are hired as “independent contractors” with the promise of a possibility of becoming a real employee, but, most hired this way won’t get it.
Saying it’s by choice is usually a defense mechanism. Maybe up to a third, are legitimately happy and well-off being a gig worker.
As for how to overcome? That’s the trillion dollar question. Because in America, the older generations are so willing to scrrew over the younger generations, normal unions won’t work. In general, no unions should ever be allowed to collect fees or manage pensions. The under 40 crowd might need their own unions. At any point, if a union sells out it’s younger workers, especially, like the UAW has in the past, the younger workers will have to form their own union and work hard to undermine the other one. In America, like some others, there is the idea that being older regardless of skill, ability, or work ethic should entitle you to make more, in America, this is far more severe, this will have to end. You get paid based on your output, with the understanding that trainees get paid reasonably less for a reasonable amount of time after they are trained. Because, if they have never done this type of job before, the company had to invest some money into them.
In order for unions to work. There would have to be large scale strikes across America, regardless of whether your job is treating you well to force legislative changes.
Personally though, I think the older generations are too selfish and so America will fall behind Europe for decades and the younger people will have lived reduced lives. I’ll probably jump ship, when I get a good opportunity.
Jump ship = move to another country
“… if they have never done this type of job before, the company had to invest some money into them.”
Virtually no company actually “invests” in real training anymore. The beauty of the gig system is that companies only hire contractors that already have working knowledge. Hence the complaint that we can’t find “qualified” workers. There are exceptions, but they are very very few.
I recall reading a job requirement around ’94/95 that demanded 5 years experience with Java. I played with Java very early. Java was released in ’95.
On average, gig workers earn about 58% less than full-time employees. The average annual income of full-time employees is $62,500, while for independent workers it’s only $36,500.
83% of workers make less than $500 per month working in the ‘gig’ economy(2017).
Only a few OECD countries have mandated skills training and certification for gig economy workers.
most gig workers would say yes to additional training and skills certification, but so far the most effective policies seem to be found in France.
California started a pilot program in 2019 to provide guidance for gig workers regarding different platforms, but it offers no training or certification of skills, the city of San Francisco offers some generic training modules regarding gig work but again no real training and skills certification.
Israel however is focusing on helping its economically impacted and vulnerable citizens, such as the disabled and Arab women, by providing support and training in using online trading platforms in order to “make a living in the online global market”OECD 2019).
Although not ever an actual member of any union, I was treated well by various union workers either working for me, or once, beginning to drive a taxi in the city of the angels, guys talked to me a lot about what the real story was, etc.
As a small non union contractor in SF area, I found the best workers were mostly well trained union guys, who would work for me for more actual cash in their pay checks, but only when their union didn’t have anything for them at the moment, and with the clear understanding that they leave if their union called, which did happen.
As a ”gig” worker when I got older, I would set my pay based on current salary data, PLUS all the various and sundry taxes and fees for the locale, and was able to increase the total every year according to the BLS inflation calculator, and local conditions, with CA fair pay up to double elsewhere in midwest, etc… that process kept me right near the middle of ”national average” salary expectations for my work, and seems to me to be the only fair basis for employer and worker.
To anyone without a job these days, I highly recommend focusing on whatever industry/position that you WANT to work in, studying all possible information now so easily referenced on web, along with as many ”tutorials” for YOUR work software, also easily accessed these days.
Set aside a daily time to study, and then do it in preparation for when the good times roll again, which, make no mistake, they will do sooner or later..
I started over for the last time in my 70s and was behind on some of the very useful software that had become popular since the last crash of my industry. Took a couple of weeks, working very long days, to get back to scratch due to software being very user friendly these days without having to troubleshoot work in binary, etc.
inspiring and instructive, thanks!
The only significant fraud I can think of is when gig workers earn money, but collect unemployment on the side because the $600 bonus is just too good. Other than that the bar for qualifying for PUA is very low. I don’t know if it varies from state to state, but there is no prior income required in Nevada and the requirement to look for work has been waived by our governor. I’m not sure how rampant identity theft has become (claiming benefits for someone other than yourself).
In the case of fraud with PPP loans, are we talking about moral outrage that rich people are applying? From what I understand, it’s not even fraud because pretty much everyone was shocked by the economic uncertainty that COVID-19 caused, and therefore qualifies for the loan regardless of whether the owners of the businesses may be wealthy. I have heard of fraud involving fake businesses created just for the purpose of collecting the money. This is clear fraud.
Given that Andrew Yang’s $1000 UBI proposal wasn’t very popular, I’m surprised to see that we ended up with even more generous handouts by the government. The simplicity of giving money to every single person makes it a much better policy, and it automatically solves the wealth inequality problem. Right now, it seems like we’re getting free money only because we’re so scared that Tesla and Amazon stocks might have a down day. We need to step up and demand UBI because this is the one policy that works against the interests of the very rich more than any other.
Yes let’s demand UBI so we can further increase the national debt, because where else is that money going to come from?
When Joe Sixpack buys a home with a 30 year loan, money is created and given to the rich guy while Joe’s hypothetical future earnings are pledged to pay back the loan (in plain English, he signs up for debt serfdom). With UBI, money is created through collaboration of the Fed and the Treasury and given to Joe Sixpack (although Jeff Bezos gets UBI as well, the amount is meaningless to him, so we can ignore that part). The beauty of UBI is that it effectively takes from the rich and gives to the poor. The current system is the opposite. You can ignore the national debt. All government bonds are effectively cash. The Fed is going to monetize them anyway. Why pretend otherwise?
@OI – UBI doesn’t take from the rich. UBI takes from your children, and grandchildren, and greatgrandchildren. The children of the rich will be able to afford it, our children will not.
@Lisa_Hooker No. That is not how sovereign fiat denominated debt works.
And propagating that misunderstanding is how the oligarchs get you to keep each other in the crab bucket.
Get a copy of Stephanie Kelton’s “The Deficit Myth” stat …
@OI – Sorry. I didn’t understand that you were talking about pure printing with no backing, not even absurd government bonds. Do a bit of research into the Weimar Republic and Zimbabwe to see the process in the real world.
I know a couple of people that are very happy. One a student that was working part time at retail making a around a $100 per week and got the $600 per week. The other a free Lance artist making about $200 per week and got the $600.
I know a masseuse who makes more ‘unemployed’ than employed. Not in a hurry to get back to work.
how dare they! start hanging the wage slaves but start with the commie artists, hang ’em up feet first.
“Every artist is a cannibal, every poet is a thief, all kill for inspiration and then sing about the grief” – the fly
Any full-time worker who makes $15 an hour or less and actually shows up for work during the entire peak of the pandemic, March though July, will have worked for five months at maximum risk to his health and have been paid less than the “bonus” $600 federal money per week that the unemployed received.
The unemployed also get the usual unemployment insurance from the state agencies. This usually is at least 50% of $15 an hour, even in the less generous states.
The worker also is still on a payroll, and thus loses the payroll tax of 7.65% for his half of FICA, and often pays local per capita taxes too.
If payroll and union dues and nuisance taxes deduct 10% off the top and state unemployment is 50% of $15/hr, then the worker get to keep 90 cents after payroll tax and the unemployed person gets $1.50.
IOW, it’s a 0.9:1.5 ratio, or 3:5, so the worker ends up with 60 cents for every dollar that the unemployed person collects.
It’s very poor economics to pay people much less to work than they can keep if they do not work. It’s also bad politics, as people then feel that they don’t need to save and can simply expect government money to appear whenever there is an economic downturn.
If the government gave people their salaries minus payroll taxes, it would have been more sensible. The blue collar guys who have been keeping everything together during the pandemic are NOT happy about getting paid less to work than to not work for five months, and counting.
This country is reaching the point where anybody who works an honest job and is not running a scam is at a competitive disadvantage, because he’s getting less for his efforts than people who either don’t work, or work at a job that is scamming the system.
This is how societies collapse – the honest workers just give up all hope and adopt the work ethic of the terminally ill 1980s Soviet Union, where “we pretend to work and they pretend to pay us”, and soon fake rubles printed by the billions can no longer buy anything in the empty stores.
I think the ruling corporate class would love to see even more gig workers including much more gig tech. Businesses want to get out of continued rising healthcare benefits (how can you blame them?) any way possible. Retail got around paying benefits by hiring mostly part-time help and making the states take up the slack for years. Now it’s gig workers being contracted by more corporations. You would think corporations have good friends in the government who can’t seem to make the laws keep up…nah.
Honestly, given the recent trend of the market ignoring all bad news and take any slice of not so bad news and run with it, I am surprise the market is not rallying again like it did every Thursday for the last 2 months. You would think something like below would translate to how they see it as evidence of “V” shape based on the delusional interpretation of Wallstreet.
“The number of people who were newly laid off and filed their initial unemployment claims with state unemployment offices in the week ended July 4 ticked down to 1.4 million (not seasonally adjusted). This is still a huge number of people filing new unemployment claims – and nearly twice the peak of the unemployment crisis in 2009 – but it’s the lowest number since this crisis erupted.”
Do you think that there will be a severe correction?
Or will the Fed jump in order to save the market and Trump?
From Europe we cannot understand the continuous climb of the US ?? markets.
Thank you for your answer.
That continuous climb in the US markets you refer to is called inflation caused by Fed money printing. But we don’t include it in our inflation reports, mostly because it benefits the ruling elites.
Bingo! Include stocks in the CPI (because they have become “consumer” items) and see what the annual inflation rate becomes.
The good news is that the economy will come
out of this leaner and stronger. The bad news
is that we are the “fat” that is getting cut. Being
surplus labor has never been a good gig.
Yes and surplus labor working at a less than living wage
The economy got a big disruption and temporary unsustainable trends are in place. I have seen some big numbers on the cost per taxpayer. Right now a lot of people are tasting the sugar, but the medicine will come soon.
My mother who is 93 says why are all the protesters not working? I mean they are eating and wearing clothes and traveling. How many of these people are living on student loans, credit cards, deferring rent andutilities and have no expectations of paying. All government budgets Federal, state, local right now are unsustainable without the Fed printing and backstopping everyone. If the US balanced it’s budget starting tomorrow, it all would come tumbling down. That’s called being in too much debt because you printed too much money the way I see it.
protestors are almost all in Big City, eh os?
Big City are almost all havens for druggies of one sort or another, legal, quasi-legal, and illegal, from alcohol to pot to horse to synthesized drugs with so many syllables in name I have forgotten the name by the time I finish reading it, (with a lot more syn type to come, likely free eh?)
Big City also, usually, has a fully developed local socialism system de facto, if not de jure, and usually both these days, with either ”free clinic” open to all, or some kind of county/city Health Department (which to be fair, every one of the dozen or so rural counties in USA that I have lived/worked in had some such also), as well as readily available food stamps, etc.
With the cash from selling drugs and the social net as listed, a lot of folks in Big City can live for eva without lifting a finger if that’s what they want… tried it briefly 50ish years ago,,, not my thing going to all the offices, etc., but have known a few folks that have done it happily since then, and a lot more who have worked briefly, then been injured and disabled for life so have received the disability portion of SS for some of their cash, while selling the free drugs, etc..
Much more difficult to set up and maintain in rural areas prior to 2008 to my certain knowledge, though can be done, especially with long time local connections.
What planet are you living on? We will come out of this with even more zombie companies than we had before. The economy will not be made stronger by zombie companies.
This data proves what hokum the UE statistics were during the “good times”. The “recovery” was a historic shift from traditional 40-hour-week FT positions with benefits to part-time and contract gig work across a wide swath of the new digital economy.
The old UE statistics ignored anyone who worked a few hours a week temping or driving for Uber or designing websites. For the first time ever, we have visibility into this sector.
It’s not surprising to the precariat who live it. But I can see how it’s a gut shock to the professional-managerial class who were able to glibly fly over it for so many years.
Funny how all the “negative” news that doesn’t follow the CMPM narrative that everything is getting better gets ignored. (CMPM is my proprietary acronym for “Corporate Media Propaganda Machine”). Anyway, FANGMANT to the rescue! (FANGMANT is another of my proprietary acronyms, I added Tesla to the mix. That handful of companies is out to save the world, god bless them).
Thanks to Wolf for posting this info.
If only we can get rid of the combination of Netflix, and Google, or Nvidia and Google… then we can call it FATMAN.
I think one could make a case for dumping NFLX, although not necessarily Google which is at 1T market cap.
Wolf,
You can’t ave it both ways. You can’t pound on the table that everything needs to close down, then be shocked that people don’t have jobs. Pick one or the other.
Just Some Random Guy,
I’ve never said “everything needs to close down.” On the contrary: I have said that you cannot shut down the economy for long.
I’ve said that lots of people are dying from this thing and that many who are not dying may end up with chronic/permanent damage of some kind.
I’ve said that people are being stupid (or something similar) and reckless against others for not wearing face masks in public when they’re near enough other people, and I’ve said that people are morons if they’re not practicing physical distancing.
If everyone wears face coverings when out and about, uses hand sanitizers, washes their hands, practices physical distancing, and stays away from mass-spreader events, you don’t need to shut down the economy to get this virus more or less under control (see Hong Kong and Japan).
But these basic measures – face coverings, hand sanitizers, hand-washing, practicing physical distancing, and staying away from mass-spreader events – have become politicized instead of becoming the national priority since February. Now, they’re like non-options for many people in this country. So here we go with out out-of-control pandemic.
One question is why Americans have taken a different approach than the Japanese.
IQ….. Asian’s on average are smarter, and less political…..
Its not just Asia though. Other countries have small issues, but the U.S. and Brazil are like the only countries that really politicized masks, AFAIK.
I just went into a store and asked a clerk about masks the other day, and she screamed “I DONT WEAR MASKS” back…
Cause we are Murica…liberty and liberty for me to infringe on your rights but not liberty for you to infringe on mine. Certainly help explain the anti vaxxer movement and some of the resistance of wearing masks. Which means if we do get a vaccine and if 20% of anti vaxxer refuse to vaccinated, can we still count on the vaccine to do its job in combating cv19?
Some polls show higher percentages than 20%.
It depends on the vaccine. If its only, say, 70% effective, or if it supresses symptoms more than transmisability, theres a good chance it won’t be enough.
The good news: supply will be limited, so there will be more vaccines for us.
We have a nationalist movement led by a moronic “populist” who denies science and reason. Same situation as in Brazil; same disastrous outcome with regard to Covid 19. We all know the problem. How do you politely say, “these people are a threat to all of us?” And how do you fix it? How did we get to a point where some 38% of the country can’t rub two brain cells together?
Wolf, you provide such great source for follow ups.
Tongue in cheek time:
On a private note sent to Wolf Richter; to be delivered this evening via Men in black. (or from Dianne and Nancy, you never know)
Dear Mr. Richter,
Your latest remarks show that you have in fact begun to fall in line with the main stream view. Congratulations, we in the main stream media, the Fed, and other important groups can now formally endorse your Wolf-o-lution. As a part of the benefit package relating to our endorsement, you will see increased ad traffic volume on your website, and should you wish to bring your new podcast to Youtube, you will enjoy added advertisement opportunities. Welcome to the world of monetization.
We do remind you to continue to follow approved rhetoric only when engaged in your Wolf-o-lution. To see examples of approved revolutions and the appropriates phrases which will garner you more media views, click throughs and other benefits, please tune in to CNN, MSNBC, or Fox New stations. While there are many other options, those three are reference channels on which you can model your behavior. For a more economic focused bent, tune in to CNBC, Bloomberg, or Fox Business.
Thank you.
*end of tongue and cheek
To follow up on the point though, physical distancing isn’t hard, neither are masks and gloves. It’s situational, but any time anyone goes indoors anywhere other than their home, masks are probably a good idea. Outside, you can be more discretionary, but mostly this is just common sense.
Wolf, love you bro!
Wear a mask. Check.
Stay home if you or any in your family is sick. Check.
The Market will be fine. No.
America will be fine. No.
It is a false assumption to assert that if we just ignored the virus and kept everything open like normal the economy would be fine. Sweden is a good experiment in how that works out. Sweden ( which did not close anything down) has many times the death rate of its Scandinavian neighbors ( which did) but has no better economic outcomes. A growing infection and hospitalization rate scares people and they behave just as if the economy is locked down. The only way to have avoided most of the economic hits was to have shut down all inbound travel about Jan 15, then tracked down every single case that made it though and put them in quarantine. You would sacrifice tourism but the rest of the economy could stay the same. If they could do it in Mongolia, we could have done it here, but now it is too late.
Great job of posting spurious arguements about Sweden without any data.
The problem in Sweden and the USA is that most of the deaths in both countries have been in Long Term Care Facilities or Nursing Homes.
In some states in the USA the numbers are even worse.
A total failure of the state and local governments in the USA and the government in Sweden not protecting the elderly.
Japan has an eldery population and haven’t had the huge number of deaths despite a population density many times that of the USA or Sweden.
It probably has to do with the BCG vaccinations program and strain used, the use of masks, and a generally more common sense of personal cleanliness throughout the country.
They have also had a huge success in tracking and tracing as a result of the system of ‘hokenjo’ at the local level.
(Another totally failure on the part of state and local governments in the USA in the area of tracking and tracing.)
Now the speaker wants trillions more in aid. Fed balance sheet set to go to 10T by years end, and the debt is 26T. Fed will have more than a third of the entire national debt. Perhaps the strategy is for FED to buy all Treasury issues and orphan their balance sheet, (taxpayer owned, uber deferred assets). Rational investors are actually buying this stuff? Or perhaps jobs return in government nationalized manufacturing industries? A boost if the product mix is far enough down the supply chain that they do not threaten value in finished goods? We put people to work, (to pay back their stimulus payments) in such a way that we subsidize corporate profits, even if it is indentured servitude.
Bring back plantations and apply same idea to all business but this time color blind. Lincoln got it wrong. And even if he didn’t his statue probably won’t be around much longer anyways.
who cares about statues? not me.
Me either. But if it’s public property elected officials should .make the decision. It’s a bad thing to not respect other people’s property even if it’s public property.
i dont give 2shits about public or private property, especially in a country that cares more about property than living.
I do wonder, however, what that elk statue in Portland did to get burned.
@Massbytes
One story I heard that it was originally set up as homage to the virility of male elks, but then some female elks were unhappy because of objectification of the females of the species, so they hired some dudes to burn it down.
The other theory was that this particular elk did not get along with members of its local community, the wolves and mountain lions especially because it didn’t want to be eaten. It was a speciest thing and the other animals objected to that fact that the elk didn’t want to live in harmony with its community. Go figure.
we will see slavery again based on simply giving people what they want: guaranteed job, guaranteed housing, guaranteed healthcare. that’s called prison.
brings to mind the old adage ‘be careful what you wish for.. you just might get it’
Are you describing Congress or Wall Street or both?
haha
yeah, reminds me of another old adage: “the rich get richer”
Will see slavery again? They never abolished slavery. They perfected it, and made it all inclusive. They call it the income tax act…….
I agree with that. You will be slave to the state from birth.
Indentured servitude is not slavery. You buy your way out. Many European immigrants came to this country under the arrangement. Each persons share of the national debt is about 70K. Jobs return (albeit at low wages), corporate America hires these people, and government taxes their profits to pay down the debt. They also use some of the new revenue to build a safety net. China has a work force based on a population of 1.5 billion people, while America is 300 million consumers. Both nations need to match producers to consumers. Trade must be curtailed, and immigration will slow when you hand every new arrival a bill for their share of the debt, and say work this off. The virus has served the purpose of destroying the service industry, so you must have one of these jobs.
Well Nancy’s husband’s hotel got about a half million of that package… (funny how that never gets on the news…) So I am sure she is eager to pass another bill. To be fair, about 11 more members of Congress cashed in on it also….
The husband of Diane Fienstein benefits from the deliberate planned destruction of the Post Office by getting access to it’s property on the cheap and flipping it at outrageous profit.
The sad thing is, a properly funded Post Office has a valuable role to play for our nation. It could fulfill it’s constitutional mission of uniting society by offering postal banking and interest for the entire nation. This would be perfect in today’s Covid situation as it would allow even rural areas to participate in work from home. It would also stop rip offs like paycheck loans that prey on the low income and with no access to banks and promote equality in poor rural areas, some of which don’t have decent internet.
Many here clearly do not know the history of the Post Office and go into reflexive bashing, ignoring this is due to planned and deliberate under funding so as to benefit private interests that donate to our representatives.
This is public asset stripping. It’s been going on for a long time already but I figure it’s getting worse under the locust regime.
It’s very similar to a private equity hostile takeover. Load the company up with debt, strip the assets then let it tank. Same thing going on with America at large, looks to me.
With the Post Office in particular I can’t wait to see what Fed Ex and UPS charge for that ‘last mile’ delivery of a letter. :(
I’ve said this again and will keep saying it. Gig workers can easily cheat the system to get UE benefits while also working. 1099s don’t show dates of income, just total income for the year. 1099s are only issued in January/February for the previous year. So someone can work on a 1099 basis and collect UE benefits simultaneously and it is virtually impossible for state UE agencies to know it’s happening. And given the volume of applications, every application is rubber stamped as it is leading to a ton of fraud. WA state was scammed out of $100M by some Nigerian scheme with little effort.
Which is why I question the accuracy of these numbers. As soon as fedgov announced $600 weekly bonuses, it may as well have been a big banner outside their doors saying “Come on in, we have money to give away”.
What gig industries have not seen huge dropoffs in available work? Please tell me. Even those gig workers still trying to make money while collecting the UE checks are probably only making a pittance compared to what they used to make.
Which means that modulus a small amount of income from continued gig work, they are essentially unemployed.
I follow the news quite a bit but through all the clickbate or whatever the fluff is, I don’t readily understand wherw all the stories are of unemployed individuals and groups. It seems very quiet in that respect. It seems that most of these people are able to get to these subsidies. Or do you disagree (with links)?
The last day for getting the extra $600 benefit is July 25 in many states, where the work week ends on a Saturday. This means only three more weeks before things get even worse than they are now. Then we will get to see if the govt really works for the people.
Well, might happen but can’t count on it. Wall Street witnessed these past 6 months it doesn’t need us, working folk, Main Street, what ever, to get richer and make the stocks go higher. They could care less about 600/wk. To them it’s better spent on QE.
I am one of the “gig workers” on PUA. I’m a self employed graphics operator that works in the live events / conferences / business meetings industry. It’s estimated that this industry employs 16 million people and generates 1 trillion in revenue. There are A LOT of freelancers in this industry. Producers, lighting directors, show callers, audio engineers, video engineers, stagehands, content producers, set design and construction – as well as all the catering, wait staff, etc.
I’m the guy behind the curtain that handles all the presentations, video and other graphics content that goes on all the LED screens. I operate 8 computers simultaneously to make this happen. I travel all over the country and internationally to pull off large events for companies like Apple, Google, AT&T, T-Mobile, the New York Times, Business Insider, Vogue Magazine and many others. I would be in Milan, Italy right now working at Gucci HQ on an event for Fast Company magazine (we did the same gig last year too). Last October I designed the presentations for the CEO and COO of Zoom and travelled to San Jose as a gfx-op for “Zoomtopia” (never heard of them at that time, but now everyone knows who they are).
This entire industry is in shambles since the “ban on humans” kicked in.
All of us had our entire schedules for 2020 wiped out in a matter of one week.
I have yet to see a comprehensive article/analysis written regarding the live events industry during this pandemic/recession but there should be. This is where a lot of the gig workers are coming from that need PUA to survive.
I’m not one of these folks making more on unemployment… I’ve been financially gutted this year (as have all by brothers and sisters in the biz). I want to work more than anything right now. I love what I do – it’s the most exciting, challenging and adventurous things a graphic artist could ever hope to achieve.
Wolf – any chance you could focus your talents on analyzing this sector of the economy that has been completely immobilized? Some say it won’t start coming back to life until mid 2021. That is a preposterously long time and I’m not sure if a lot of smaller production companies and freelancers can survive that long.
We were the first to shut down and will be the last to return.
I feel like this is a shadow industry that most people never realize exists (because if we are doing our job well, you’re not supposed to realize we’re even there.)
This industry is directly related to the hotels, airlines, convention centers, ride-share and restaurant industry.
I feel like we cannot have a full economic recovery begin until this industry is back up and running in some capacity.
Thoughts?
One other thing – the PUA isn’t just for gig workers. I know people that had to leave their jobs in order to care for elderly relatives that are at high risk. They get PUA too.
KamikazeShaman,
Yes, the events business got hit really hard. A good friend of mine had a company that made expo booths for trade shows. He went bankrupt during the financial crisis and left the business. Now it appears to be a lot worse than back then (all expos cancelled). I will look and see if I can get some reliable data on it.
In terms of your last line, I ‘m guessing they may be getting the other federal program: Pandemic Emergency Unemployment Compensation (PEUC), which covers certain people not covered under other programs.
So many folks are living on the edge in debt, I think the folks looking at the data know they have to keep the money flowing or there are going to be defaults on everything. Credit cards, cars, student loans, rent contracts, housing which all will stress the financial system if defaults happen. Plus you already have unhappy people in the streets that say life is not fair so we need to tear the system down. It’s not good and the money is going to have to flow I guess.
I think central planners all believe that the big mistake after the great depression was tight monetary policy and they are going to err with loose money policy this time. The reality is after you blow a debt bubble you are going to have cosequences. No matter what you do. You mainly fight over who is going to take the losses. And we should all remember a politician’s favorite slogan “Never let a crises go to waste”.
Some people are tougher to fire than others. I think you can be at a disadvantage if you are in a right to work state in USA vs same company with similar facility in France. It’s the US flexible labor force vs. brittle labor in France. I have heard the same complaint about air traffic controllers who are contractors vs Federal Employee. The good thing is contractors are easier to hire too as you are making limited commitment
Kamikaze – I expect the “online events” business should be booming and there should be spots available for top talent.
where I work we have (perhaps permanently) replaced all the live in-person gatherings, conferences, meetings etc. with online events. The basic WebEx/Zoom thing gots old fast, and people are coming up with a lot of variations and improvements.
Also, most schools replaced live graduation ceremonies with online/video based stuff. Lots of room for added production value there.
Finally, I’d look into weddings and other major-life-event celebrations. People are still having those; they’re just doing things differently.
The need you previously met has evolved, but it hasn’t gone away. Keep looking, talk to everyone you know about what is happening in their life and what they would love to see, and use that creative power!
There is currently no “The” people. There is “Three” people.. one lodging in the white B&B, two booked at Hotel Capitol. This is the worst wobbly dining table in town. Legs four and five, court and press, have proven to be made from dry rot and crumble under pressure. The time may be near to cut down some big oaks and fashion a new sturdy table with seating for all. Otherwise, there’s no reason to break eggs to make those omlettes as we all end up eating off the floor. “Waiter! Waiter!” “Sorry sir, we had to let him go again.”
Nice metaphors !
“Temba, his arms wide.”
DawnsEarlyLight:
“Shaka When the Walls Fell”
Star Trek…….
Stardate: 45047.2……..
Season 5, Ep. 2
Nice!
Saw that episode a couple of months ago and thought the same.
Darmok and Jalad, at Tanagra. Picard and Dathon, at El-Adrel.
Showrunners, in the jacuzzi, with wine and cocaine.
I’m sure at least some form of it will be extended. After all this is an election year!
I’m not so sure. Our govt is so detached from the average citizen, it’s almost funny to call it a representative democracy.
Remember when Mrs Alan Greenspan did “reporting” on the economy? You know the economy, right? It’s that thing you read abt in university Econ glass regarding the Little People and how they order their lives so they don’t kill each other or get drunk all day long. Every now and then she’d let slip how detached from the economy she was the internets would have a field day piling on. Especially when she reported on Social Security.
Wasnt it Greenspan or Bill Gates that, when asked to price everyday commodities, thought a gallon of milk was $10?
Amost?
I am 65, and have felt this way for so long, and am dismayed that after all these years it is NOT “almost”.
Still better than China though. Right? Right?
“I used to think I was poor. Then they told me I wasn’t poor, I was needy. Then they told me it was self-defeating to think of myself as needy, I was deprived. Then they told me deprived was a bad image, I was underprivileged. Then they told me underprivileged was over-used, I was disadvantaged. I still don’t have a dime. But I have a great vocabulary.”
(Jules Feiffer, cartoon caption, 1965)
Just because we can scream at people using Twitter does not mean positive change is possible.
I guess that’s why I became “Financially Challenged” in my youth.
That’s because it isn’t. It is a Federal Republic….. at least it used to be….. before the States sovereignty was eliminated.
Agree re detachment P, never seen the likes in 75 yrs, crazy bad.
Agree with OS on the money has to keep flowing, per:
1. elections coming get ready to dance, who’s gonna do best by us wallflowers??
2. already riots in the streets, apparently not completely equally spontaneous everywhere == at least somewhat coordinated, eh?
3. so, either pay or the covidiots will play some more and we will all suffer more of this stupid maker virus, with a very real possibility in my mind that riots may get SO out of hand so that nobody is immune from results of both riots and virus
4. as pointed out by G on here, nobody really knows exactly what, (and the extent of that what,) this virus will do eventually, including likely mutations that may be more benign or may be more deadly
5. clearly a long long way to go on all fronts, social, medical, economically; keep your powder dry, eh
It’s not a representative democracy. It’s mob rule with a very small mob of 435 holding the bottomless purse.
As I commented a few months ago, I read somewhere that the government would have to do another “stimulus” package to pump up the 3rd quarter GDP.
It really does feel like I am living in a some sort of virtual reality at this point.
Nah, virtual reality is way more fun. Try Half life on Valve Index, I take that over this so call FED induced market economy any day of the week.
Been thinking the same – but then I look back at history and ask myself what THAT would have felt like. Many years were totally crazy. I actually think we’ve just been lulled to sleep by 20-40 years of anomalous peace and prosperity. That may have ended.
Figure it’s time to strap in, get priorities in order, and stock up on favorite relaxants. Things can change fast and stressful decisions will need to be made.
Very true, Wisdom Seeker
Time to arm, both physically and spiritually.
No getting through this without an appropriate philosophy, and being able to look it squarely in the face.
Invest in a still. Preferably wood fired.
Not sure if people talking of V-shaped labour market recovery ever seen an HR department in real life. Hiring that many people in such a short time is bureaucratically impossible. Firing a professional takes 5 minutes, recruiting take 5 months.
I don’t know…looking at Wall Street suggests they hire their so called professionals in record time. Q-“Are you delusional?” A-“Definitely!” Bada-bing…”Hired!!”
Apparently you have never filled out all the forms for terminating a vested employee.
Actually, Florida has begun to process PEUC claims.
Unless I was VERY drunk, I would not be here at this point. Bankruptcies:
Diamond, Whiting, JCrew, Golds gym, Neiman, JC Penney…..ad infinitum
Bernie just [allegedly] stated that Biden will be the most progressive president since FDR. His campaign site says it is offline if you try to contact. You can stll give $$$ however, LOL.
It would take a very long time to relate all of the egregious sexist and classist things I [and many others] have endured during our working lives, and refused to participate in, and have paid for not participating. It’s time to say, flat out, that this culture is a fucking joke.
And if you don’t publish my comment, Wolf, this site is a fucking joke
portia,
Your comment is political in nature, and so it gets reviewed first before it sees the light of the day. And it passed. I don’t want endless, bitter political arguments and name-calling to break out here (though they do anyway occasionally).
CNBC, also citing DOL, gives 1.314M new claims, and 18.1M continuing. Pretty close, but any idea why the discrepancy?
https://www.cnbc.com/2020/07/09/weekly-jobless-claims.html?__source=sharebar|twitter&par=sharebar
CZ,
The media mostly report “seasonally adjusted” numbers. But these seasonal adjustments have gone haywire in this crisis because they were never designed for these huge numbers. So they exaggerated the initial claims by a few million upward early in the crisis, and now they do the opposite. I stopped reporting seasonally adjusted unemployment claims for that reason and report only the raw “not seasonally adjusted” data, as you can see in the text.
Also, the federal numbers (PUA, etc.) are not seasonally adjusted at all, and to add them together, everything has to be in raw form (not seasonally adjusted).
Whenever I go to FRED I make sure to plot the unadjusted. I want to see data not an opinion. I can smooth curves myself.
Good thinking.
The whole economy is just getting worse and slowly disappearing like water on the sand, which is obvious if you pay any attention to the news, blogs, family, or friends. The pandemic is getting worse too. It is all there for the seeing.
I really do not know that much about the economy, but unless I am completely wrong, we are going to have a depression like the Long Depression (1873-1896) only deeper than the Great Depression of the 1930s. Unless we have something like the New Deal, we are looking at great unrest and continuing collapse.
Yet, Congress is looking for any reason not to give financial aid to something like 40% of the population that needs it just to buy food.
So, is the Congress stupid, arrogant, suicidal or hopefully, just monumentally ignorant, which possibly can be corrected?
I think only 1% or so work on farms and about 15% in making stuff. It kind of leaves the other 84% of service workers and most unemployed are ignorant of how the basic stuff of life is produced. It all is basically produced under very tough high stress working conditions. We are so fortunate to have all the material stuff without really getting down in the coal mine to produce it. We start off on third base compared to someone starting out 80 years ago.
JBird4049,
its just not that easy. financial aid to 40% of the population has consequences too. possibly jumping from the pan into the fire.
try earning a living from a small business and managing only 3 or 4 people. then scale up to 100s of millions. i really sympathize with leadership (even the lefties).
there are lots of people who never liked what the economy was doing pre-covid, just like there were people in the 1920s who knew the excess would lead to trouble. such is life.
but imo your unease is not misplaced; this is gonna be pretty intense and being a ‘prepper’ in this environment is something people can do without having to wait or rely on distant politicians to act.
Prepping – not so sure, seems reliant on surviving on your own or with very few other people. This is extremely difficult and not typical of successful human communities. I would go the other way and look at mutual aid, we are going to have to help each other – the nation state isn’t coming to the rescue of the masses.
‘Prepping’ has become a really odd sub-culture, soaked in paranoia and fantasy, and does not relate to successful survival strategies of past communities and families – ie prudence, foresight and hard work.
With a lot of luck. The gods must favour you, or you are doomed, is the oldest and greatest truth of all.
However, as an economy collapses -and that is what we face – investments in society and neighbours will tend fail as they too will go under. Much of this will depend on location.
All my careful work here over many years to cultivate useful good relations has evaporated, due to people losing land to development (ironically ‘Green’ ) imposed on them, and by simply going bust……
We are facing a ghastly combination of he worst of the 1930’s + 1970’s + 1349 (start of the Age of Plagues).
1349 was also at the start of the Little Ice Age, but we will probably heat up instead (or drown in torrential rains.)
read ”State of Fear” by M Crichton regarding coming ice or fire X.
came across it recently and had some of what’s left of my mind blown by his presentation of data with references and thorough bibliography in an entertaining novel format; should be required reading for anyone interested in science, scientific methodology, current climate situation, etc.
as for your 1349 reference, ”zounds goot” a response/reason as any re the curve of human population on earth since then
obviously, Gaia has had enough of the itching and other damage our species has clearly done to her/it/they in the last five or seven centuries, and we can expect a lot more activity to put us back in our place, contributing, rather than continuing our destruction
The obsession with a “v-shaped” trajectory for any setback/correction is telling of the American way of thinking. That you can bounce back from every disaster if you just work hard enough. In a sense, it’s innate human arrogance in the face of vastly greater natural and/or divine (if you’re a believer) forces. It’s closely related to American exceptionalism and all of this made possible due to the status of the USD. But times are changing…
It’s not “American thinking”, it’s marketing-supported psychological denial.
If people act as if there’s a recession/depression, they change behavior in ways that exacerbates the recession. Good for individuals, but not good for the corporate overlords. Advertisers can’t let that happen, so media go into full-denial mode.
A system-cleansing recession is potentially long-term good for society, a chance to finally address all the papered-over issues, but the process is really messy, will have a lot of random extreme outcomes, and is politically very risky.
Wisdom Seeker,
i agree on the ultimate good to come from this. but we aren’t able to address any of our ‘papered-over issues’ until that paper is totally burned out. we’ve got a lot of printing, financing, bailing-out, inflating, rescue packaging and stimulating to do before we can really get to work. i think both political parties are equally up to the task.
I get what you’re saying but this expectation to bounce back from every setback is premised, even if unconsciously, on America’s preeminent standing in global and financial affairs. There’s no way any other stock market can do this (make new highs) when the underlying economy is in the gutter like this. And the only reason the U.S. market can do this is because of the Fed and the only reason the Fed can print insane amounts of money without destroying the currency and causing hyperinflation is because of the USD’s standing as the global reserve currency. So if the typical American has expectations of v-shaped recovery, it stems from this state of affairs.
good one WS,
very accurate and acute, as well as, unfortunately, chronic for at least the last 60-70 years
question came up this morning, ”Is USA still allowing what is usually referred to as, ”subliminal advertising” or sub messaging, etc.”
remember reading, maybe a decade or so ago, that USA was among the only few nations that had not made law against that practice, and wondering what exactly is the situation today..
has to be some reason that we are almost in last place with SO many metrics of population awareness — such as mask use in the current situation —
thank you
@VV – There are no laws prohibiting ”subliminal advertising” in the US. Proposed bill have always failed. The FCC has issued statements (Public Notice FCC 74–78) disparaging its use. The FCC could revoke a broadcasting license. However there is no legal basis for a suit.
“V” shaped recoveries from stage 4 cancer are very rare.
Many gig workers, especially in places like New York City, will be the last to return to work. This is especially true of those in theater, television production and movies, because their venues will not be reopening any time soon, regardless of what the general economy may do. Their jobs are the hostages of the state and city “health” authorities and governments. Meanwhile, not only will their financial situation continue to deteriorate, but their overall health, as well.
I hated to say it, but those that are the most politically connected are going to probably come out the best in this downturn. Being part of a union or politically connected business will probably get bailed out. For example my son is part of a teacher’s union that gets guaranteed 7% fixed return on one of his investment options separate from his pension.
It has me thinking more about what assets the government is going to support and which they are going tax or inflate away the value.
At first it will indeed be political, about connections and leverage likethe corrupt unions; so that’s how to spot the ‘winners’ in this.
But then, it will all run away with them -as it must.
And thus why David Bowie placed his real cool cat, Halloween Jack, living on top of Manhattan Chase. Don’t know if the elevators are broke yet, but the building’s still there. Could be prime real estate in a last gasp situation. Ironically was under control of Chinese investors group. How’s that for a bad omen?
My union has issued comprehensive protocols for returning to production of motion pictures and television. Very difficult and a tremendous reduction of productivity of a very expensive process. Oh well.
The Gov’ment is marinating the numbers .Won’t be long the cooking will commence. Just like the slow smoking of a Boston Butt with hickory and apple wood yum yum. By the end of July when all is good and tender and is ready fer’ th’ pulling or chopin’ the un-employment will be at 9% and falling fast. They may hit 7% if they can sneak that special sauce in at the end then whomping it up and adding back the drippings of the end of the $600 weekly federal add on. The un-employment numbers will be at 5% in no time. Them there fellers’ in Washington are smart.
ya buddy DrD,,, good thing I am reading your story just ’bout time to start gittn dinner, eh?? (dinner being the first meal after noon, NOT to be confused with lunch, supper, etc. by any of you modernistas)
but, all seriousness aside, we are in the most craziest combo economy/medical/social situation this old boy has ever seen, even far far worse than the riots, etc., in the late 1960 era, and look what we got out of that — ronny ray gun spraying tear gas by the ton because one or two out of one or two thousand were doing criminal damage instead of doing constitutionally protected assembly and marching and so on
WE the PEEDONs need to be very aware and wary that our owners/masters do not get any more reasons/excuses to dampen our revolutionary/evolutionary ardor this time, if for no other reasons than that such dampening might just very well become the final straw to break the back of middle class ”normalcy bias” and actually foment another go at the brass ring(er)
I am retired, but I do ‘gig’ work too. Freelance writing. Nothing big, but a paycheck is a paycheck. As I’ve written before in the comment section of WS, I had two articles recently published (both print and online), but neither magazine had paid me. Yay, I just got a check for one. Two months late. I’m still waiting on the other. Four months late.
I get it.
What I can’t understand is what I saw on two trips about a week back in Maine. Both were from a relatively affluent community and then one went about ninety miles through “back country” up into the mountains and back. the second was through Portland suburban fringe and then into some hill country near the the NH border. On both trips there were way more “hiring” signs than I have ever seen up here. Leaving town the local paving/roads contractors had maybe eight big “hiring” flags out. Every small mill (pallets, etc.) had hiring signs or flags, fast food places, motels, etc. etc. I don’t recall ever seeing a small fraction of hiring signs and have traveled these areas frequently for many years. And the business types with hiring signs were quite broad.
Rural areas are going gangbusters. Most of the work can easily be social-distanced. It’s the dense urban cores that have been shut down the most.
Labor shortages are very common in affluent areas. Working people can’t afford to rent there. Especially in affluent areas with very high rents such as in California. It’s been a vicious cycle for decades.
The high cost of housing and medicine is ruining the country. Less accessible work = more public assistance. Less goods bought, Less margin for small businesses to make it, even before the virus.
Wolf,
On your first chart, federal continued claims should be blue and state red, no? Federal are declining, state are expanding, if my understanding is correct.
Igor,
Your understanding is not correct. Continued claims under state programs have been declining, continued claims under federal programs are surging, as the chart shows. The DOL’s report is linked in the text. Check it out.
We have what is technically called a “Shitpot full” of people whose unemployment will run out on the 25th.
Rent and Mortgage moratoria are also ending.
Mass evictions have already started in some States, Arizona comes to mind.
A few thousand newly homeless in Phoenix in early September with temperatures well above 100 degrees, during a pandemic…
I wonder how well the various Governments will handle a few Million newly homeless Americans?
I shouldn’t worry, after all this is a Christian Nation justly famed for compassion…
Saw a video just a couple of days old of parts of CA, Riverside and some mall called Fashion Island. Riverside streets were lined with endless tents full of homeless Californians. The upscale mall had almost no traffic.
Fashion Island would be in Newport Beach…where one of our Cali. RE thumpers just got through citing. Was where they held the original Surfer’s Stomps in the old days, along with the armory in Riverside. Dick Dale was the core inspiration and lived out there. Little Richard also dwelled in the Inland Empire.
32 million unemployed, why not 64 million or even 128 million?
The US economy is debt. Debt drives the economy forward, employment does not.
We have had 6+ months to observe how employment/unemployment rates effect the economy. I would argue that the effect, US unemployment rates have had on the economy, wouldn’t ever register a 1 on the Richter scale?
Drop deficit spending to match unemployment level loses to say 5, 10 or even 20% and the real economic driver of the US economy, will be visible to all.
The US dollar and the US 10 Year treasury yield have much to say about things, but no one is listening.
George W,
Debt grows wealth! Sure seems that way. At some point, everyone needs to make their nut, and you can’t feed everyone the same, borrowed nut. The question is: how close are we to that point?
The certifications for gig workers to receive PUA Pandemic Unemployment Assistance look pretty easy (“sign here”).
There’s bound to be some “fraud,” where folks might still be able to find work, but decide it isn’t worth the hassle to scrape up gig job crumbs.
But what’s amazing is that every single Uber driver and independent contractor didn’t apply the very first week.
Stop with the unemployment fraud already!
I know who you are, I deliver packages to you everyday. You don’t work, you haven’t worked in 20 – 30 years, if ever. We are closing in on adding 1 Trillion per month in debt and still, you have no shame.
You are riding on generations of fraud in every government entity that has ever existed. Of course, you deserve every penny that you get, ridiculous!
The economy was shut down to protect you from dying, not the able bodied working class! Unemployment fraud? We are approaching 1 trillion dollar monthly deficit’s and all you can focus on is on possible working class unemployment fraud?
Get a clue, a 1 Trillion dollar monthly deficit is 12 Trillion a year. Soon, most if not all of you will be in a world of hurt!
George, I am missing my package from Wayfair, can you please make sure it gets to the right address. Much appreciated.
:-P
1 life size, sexually enabled, goat, blowup doll was delivered and signed for on 07/10/20 by MCH. Please contact Wayfair’s customer support help desk for further assistance.
George, I don’t have it, and I will have you know it was a moose blow up doll.
Damned Wayfair, can’t get anything right…. get the order wrong, and then get the delivery wrong.
George W,
From my experience most of the unemployment fraud is done by the govt denying benefits to workers on small technicalities. Oh, you have worked for years, moved to a new state and just lost your first job there, you don’t qualify. You took a month off without pay to care for a loved one last year, you don’t qualify. We can’t process your claim because all our H1Bs really don’t know how to code.
I could go on but you get the picture.
I have become convinced that Dick Cheney was actually right: Deficits don’t matter.
My reasoning: People who obsess about deficits have way too narrow a time line. They are locked into an individual working persons view of 35 years ( average work lifetime ). This leads them to the conclusion that debts must be repaid in a very few years.
Governments are immortal beings. So debt repayments have a FAR longer time line.
Trillions of dollars of debt can be repaid over three to four centuries.
See ? Now everyone can stop obsessing about national debt.
Yeah. I want a 5 million dollar loan for 100 years, no payments, just a balloon payment at the end of the term. ;-)
Are you an immortal being ?
You know, like a government Is immortal.
That is the problem when thinking of government debt ….if you pay back over centuries….extreme debt is easily managed.
Wolf, do we know for a fact it isn’t the same people going from state unemployment to federal programs when blue inches down and red up?
State unemployment doesn’t cover gig workers and contractors. Only federal does. But federal doesn’t cover regular employees who have lost their jobs. It’s the same unemployment office that processes both types of claims.
if you file a state initial unemployment insurance claim and don’t get issued a check, (don’t continue to receive unemployment insurance), “insured unemployed,” might it appear as if you went back to work?
No, these are “claims,” not what has been paid out. As I mentioned, in California at the end of May, there were 1.88 million people who were claiming UI from weeks earlier — the insured unemployed — who still hadn’t actually received any payments. The data here is “claims” not payments. Payments are a very different story, with many people waiting for a long time before they get paid for whatever reason (but others get paid very quickly).
Wonder how the various unemployment insurance funds are capitalized at this point.
Would they actually run out of money?
MCH,
Once upon a time in California, the employer paid for UI benefits. Each employer would build up its “bank” to cover UI claims by employees that it laid off.
There were different percentages charged against all employees wages, depending upon the state of your “bank”.
UI in California was/is funded by employers. Gavin’s businesses are shuttering. When a business throws in the towel, it isn’t going to deposit more money into the state’s UI coffers.
From the looks of things in the Golden State, the Governor is going to have a bit of a shortfall in that category!
I think most of the state unemployment funds have already run out of money, or are close to it, and are getting propped up by federal money.
I’m catatonic especially after reading about the pending proposal by the SEC to establish their latest rule change. With proposals like that, there is no social contract possibility, and the US stock exchanges are a total farce.
So Tommy that’s a big NO.