Some people returned to work, but 1.64 million newly-out-of-work people filed for state or federal unemployment insurance. Labor market at essentially the same level of terribleness for months.
The total number of people who continued to claim unemployment insurance under all state and federal unemployment programs jumped by 1.3 million from the prior week to 32.12 million (not seasonally adjusted), the Department of Labor reported this morning. It was the second highest ever.
Blue columns: There were still 15.85 million people who continued claiming unemployment insurance under regular state programs, not seasonally adjusted. This was down a tad from the prior week, and has been on a continued downtrend since May.
Red columns: The number of people who continued claiming unemployment insurance under all other programs – and we get to those in a moment – jumped by 2.27 million to a record 16.27 million.
This 16.27 million includes 12.96 million people, such as contract workers, claiming federal Pandemic Unemployment Assistance (PUA) and 1.14 million people claiming federal Pandemic Emergency Unemployment Compensation (PEUC). Plus some other programs – more in a moment.
It boils down to this: The number of initial claims filed under all state and federal programs in the week ended August 1 by people who’d newly lost their work was still catastrophically high at 1.64 million, but less catastrophically high than in the prior week. And some people returned to work, but not nearly enough. So the total number of people who continued to claim unemployment insurance under all programs rose again.
People can only claim unemployment insurance either under a state program or under a federal program, but not under both and not under multiple programs. All types of claims are processed by the same state unemployment office.
Newly out of work: 1.64 million Initial Claims under state & federal programs:
Initial claims under state programs, filed by newly laid off people, were still catastrophically high during the week – 984,192 “not seasonally adjusted” and 1.19 million “seasonally adjusted” – but less catastrophically high than in the prior week (down by 222,852 not seasonally adjusted and by 249,000 seasonally adjusted).
Initial claims under the federal PUA program for contract workers (Pandemic Unemployment Assistance) came to 655,707 not seasonally adjusted. This is still a huge influx of newly out-of-work contract workers, but smaller than in the prior week.
Under those two programs combined, 1.64 million people (not seasonally adjusted) who newly had lost their work filed their initial unemployment claims.
Continued Claims under other programs.
I mentioned above the continued claims under state programs (blue columns, 15.85 million); and the continued claims under the federal PUA program for contract workers (included in the red column, 12.96 million); and the continued claims under the federal PEUC program, which covers people who don’t qualify for other programs (included in the red column, 1.14 million).
But there are more programs, and those continued claims add up.
STC / Workshare: 413,385 continued claims. These state programs “allow an individual who is employed for a portion of the week to collect UC. Under STC, an employer elects to avoid layoffs by reducing the number of regularly scheduled hours of work for all, or a group of, individuals during disruptions to a firm’s regular business activity…. STC looks at the hours of work and provides individuals a pro-rata share of weekly benefits based on the reduction in weekly hours of work.”
Federal Employees: 16,170 continued claims
Newly Discharged Veterans: 16,271 continued claims.
Extended Benefits: 67,909 continued claims. Covers workers who have exhausted regular unemployment insurance benefits during periods of high unemployment. It provides up to 13 additional weeks of benefits when a State is experiencing high unemployment, and up to 20 weeks in some states.
Data Chaos, and what it means…
There are allegations of fraud and double-dipping, but also of under-counting, and of states still being woefully behind processing claims, given the historic onslaught of claims and the complexity of the new federal unemployment insurance programs, that states have to administer with their ancient systems, exacerbated by staffing problems state unemployment offices had trying to ramp up to deal with the crisis, and the subsequent training problems that emerged as they tried to train those new people, in order to deal with the crisis. There are constantly new stories emerging of just how chaotic this still is.
But amid all this data chaos, the picture that emerges is that of a labor market that had taken a brutal hit early in the crisis, and while some aspects of it are recovering and some people are returning to work, other segments are seriously deteriorating, and shifts are occurring, but the overall situation has remained essentially at the same record level of terribleness for the past few months.
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Not to worry. The fine snake oil salesmen at the BLS will be reporting under 10% unemployment tomorrow on the monthly unemployment report, whether it is or not. Whatever it takes…
Trump already made up the number, you watch.
Then with the cut of the 600-a-week lifeline, it will force people off the rolls because they will give up, just go hunting for food and assistance.
More people fall off the rolls.
By November 4th, DOW at 30k, Naz at 12k, S&P, 3500 – Unem under 10%
Best econ ever,… then Hell breaks loose…. esp when BA goes insolvent.
“Trump already made up the number, you watch.”
Now how did he actualy do that? According to the Left, Mr Trump can not read, is an idiot, and all sorts of other things.
Yet, here he is being able to manipulate the ‘THE NUMBER’ and so it so well that there won’t be a peep out of the entire government, but leaks come out from the White House about the most minute, riduculous things. And Top Secret convsersations get reported as well.
Please let us know how…………
So are you going to whine or tell us what the real number is?
Agreed, BLS will pull a rabbit out of a hat. And don’t forget even though a successful coronavirus vaccine has never been developed there are a whole gaggle of vaccines that will be available in the near future, probably before the election! Dow 35,000, S&P 4,000, Nasdaq 15,000 soon….heck why not. For the investor class the economy couldn’t be better, it’s a great time to be alive! Peace and prosperity thru asset price inflation. Monetary policy so easy even a caveman (named Jerome) could do it!
Latest indication is Trump may continue extended unemployment and do a payroll tax holiday by executive order. If he has the power to do so. This will leave the states in trouble however. I doubt he cares about that.
Likely to be blocked by a court injunction. The states are struggling now, to give them guidance not backed up by legislation will only make the situation worse.
He doesn’t have the power…only Congress. So much “hateful” speculation, come on folks. I read Wolf for truth and facts backed by concrete data. Extrapolating or predicting future events based on the data, not speculation willy nilly, and wishful never Trump or forever Trump. I will admit, however, your comments are keeping me laughing!
A big question in my mind are how are employees on an academic calendar reported. If a university employee does not normally work summers ( a janitor for instance) , but the university decides to only open in the fall with on line classes does that janitor become unemployed now when the decision is made or at the beginning of the school year. Same for k-12 teachers if school does not open, or coaches etc. If these don’t show up till the beginning of the school year we have a massive bump in unemployment on the way in about a month.
This is based on actual unemployment insurance claims made by people who lost their income because they have been laid off (involuntary seperation). The state unemployment office verifies that with the employer.
In terms of filing unemployment claims, people have to lose their income first before they can file. So, as soon as the paychecks stop going to the janitor, he can file for unemployment insurance, not before.
Does the PUA (the $600 a week federal benefit) work the same way? If I work for Uber, do I have to prove that I didn’t work that week? How can they? the 1099s that come out at the end of the year don’t mention what date the work was performed, merely that you got paid. Can I work for Uber and still collect or does Uber have to verify that I no longer am an active IC??
You can probably try whatever you want and hope for the best. For my part I would like to stay out of prison, I have heard it is not a pleasant place.
If the states administer the program, they use the same systems to check on employment they usually use. Most states have a digital system where employers submit the employee’s information after termination, automatically.
The unemployment office can check the reporting system or check by other means that the employee truly has no work available through the company. The employers all have automated payroll systems even for contractors. Eventually the state will see the employment record.
So let’s get this straight. The extra $600 a week has NOTHING to do with any of this and is NOT the PUA. It’s an additional amount on top of unemployment compensation.
So if you worked for Uber, you can claim unemployment insurance under PUA, and if you get UI under PUA, you will also get the $600 extra a week on top of it. Well, you did, but the $600 extra a week has now expired until further notice.
And yes, you have to show proof of income when you submit your claim. Not sure how thoroughly they check all this stuff. If you commit fraud, it could get sticky later if they catch you.
Unemployment only pays a fraction of your regular income. The $600 a week extra is designed to give you more money so that you spend it and pay your mortgage or your rent.
I have already seen these data bent far out of shape by a lot of the media. State claims(which are down) is the talking point, with the red parts of the graph unmentioned…
I can’t contribute it all to laziness…
I appreciate you pointing out that the data is suspect for now; but some reporting is even more so…
Thanks for your hard work.
“Big numbers” tomorrow Wolf. The President has already said ;)
3 million to 3.5 million is my guess.
“John bought an ice cream” –> Count John in!!!! Keeping others employed is being employed!!! Two Americans beating with one heart through a business transaction.
My son is teacher at community college in NYC. All teaching is virtual, which means once you do a good job on a video lesson you can use it the next semester. He got into biking and now is doing gig work delivering for two companies. He plans to tudor kids in math as there is a need for that as well. So does he count as having four jobs.
That IS interesting. Does one person having four jobs count as four people with one job? It may seem a crazy question but I can fathom the jumble of the numbers to make all better.
Who owns that video lesson I wonder?
When I did such things, the school owned the rights to the video.
So the schools own the lesson plan as well? Imagining the further collapse of the public education system, and public educators trying to work privately and find the educational material is legally locked up?? How do we get around that??
Tutoring is going to be huge for the next year.
My sister lives in Alexandria Va and they decided to find a tutor, twice a week for two hours for their 10 year old. Just to supplement the online classes with some one-on-one instruction.
Apparently, good reputable tutors are in high demand and the price is getting crazy.
Your son should do great in NYC.
In the new regime, picking up a spoon to feed your child also counts as having a job.
Heck if you still get up in the morning, you’ll be counted as having a job i.e. living your life.
Anything fails, there’s always #FindSomethingNew
My daughters REQUIRED virtual classes, as opposed to what have been the normal on campus classes, are an additional $750 ($150 each class) for Distance Education Course Fees. Sounds like the Educational system has found gold at the end of the rainbow!
It means he counts as someone who wants to do well enough to retire early and get out of the rat race. Good for him
“So does he count as having four jobs.”
Not here. These are actual unemployment claims. One person, one claim under one program.
The BLS (tomorrow’s data), in its surveys of households, counts working people. So if your son has four gigs, he is still one person who is working and counts as 1 working person in the household survey.
The BLS also does a survey of employers, and if your son works for two employers (not as a gig worker), for IBM 8 hours during the day and McDonald’s 6 hours at night, his jobs might be counted as two, and they ARE two jobs since two people could be doing them.
But this “establishment” survey doesn’t capture many gig workers. They show up in the household survey.
Note that the household survey does track “multiple-jobholders”, people with multiple jobs, as a separate line item. Watching the trend in that specific line can be informative.
The latest out of the New Orleans news is that the state has reinstated the looking for work requirement, which had been deferred during the $600 benefit period. Now the unemployed most apply for 3 nonexistent jobs every week. There was no warning this was coming, expect many to not qualify for this week’s state payment.
There was also news on Exxon eliminating the 401K match, starting in October, at one of their plants.
LOL. There aren’t three job openings a week in the entire state. Did they institute the work requirement for food stamps too? It’s going to get ugly out there very, very soon.
Disagree. Don’t think it will get ugly.
I feel this is mostly impacting the bottom 10% of the population. It will not get ugly until it impacts let’s say 50% of the population?
In New Orleans the majority of jobs are retail and hospitality, very low wage work. Most hotels, restaurants, and stores there are still closed. The impact on them is probably at least 50% unemployed.
Ummm, we’re at 32.1 million claiming unemployment out of a workforce of 131 million in 2019. That = 24.5%, not 10%.
Yes, in principle, but quibbling over details, the labor force is considered to be 160 million (BLS). So that would mean that 20% of the labor force is unemployed (not 24%).
When I said 10%, it’s basically 10% of America as a whole. Some cities/regions will be impacted more.
Also, let’s talk about “impact”, what I really meant was desperate. Those people should be helped ASAP.
The rest are not living a great life, but they are not out in the streets either.
So you’re optimistic right up until 160 million people are out of work? How is that reasonable? The Great Recession came nowhere near that number either.
You don’t have to apply for a job opening, you just have to submit a resume’ or job application to a business
I wonder if sending out resumes counts? If there aren’t any job vacancies posted, how does someone apply for them?
Saylor answered it . Thanks
Petunia, this means that there’s a fantastic job opportunity out there for enterprising people with some IT skills:
1) Post random job openings for whatever services you need.
2) Charge a nominal “processing fee” for job applications.
3) Use 50% of revenues to pay for said services.
Should be hundreds of applicants for every reasonable-looking job for a while.
And you’re doing the unemployed a service by allowing them to apply for jobs, thereby making them eligible to collect the UI benefits! Win-Win!
“Now the unemployed most apply for 3 nonexistent jobs every week.”
Oh, that must be really, really tough applying for three jobs a week to get unemployment.
Do you want to hear about getting unemployment in Australia?
I think that in Australia people have to apply for 10 jobs A WEEK, go meetings at the job places, AND undertake other activities such as volunteer work or some other approved activity which amounts to 20 hours a week.
And then, up until the crisis hit here, they counted ALL your HOUSEHOLD income including actual interest, dividends, capital gains, rent, etc when determining if you could get any money.
They added up all that income and any income from your husband/wifepartner was making and if it was over something like $45,000 a year you got nothing.
And another requirement was to list all your assets. First, if you had xx amont of liquid assets you had to wait xx weeks, if yy in liquid assests you had to wait yy weeks. The more you had the longer you waited.
If you had cash and shares they would deem income on those assets at a specified rate and add that to your real income (even if there was no real income being generated from it) and add it to your income for determing your rate or qualification to get unemployment. If you had over a certain amount of ‘TOTAL INCOME’ (real or not) you got nothing.
And to add to your misery, if you got a redundancy payment that say covered 6 months of regular income when you lost your job, well guess what?
That’s right, you couldn’t get unemployment until after that six month period and then all of the above would kick in.
And once they determined all your assets, deemed inocme on those assets, any other income they apply a formula that reduces your unemployment amount paid in accordance with those numbers.
So if you had alot of assets and/or other income you could be looking at getting very little and still have to apply for jobs, fill out the paperwork, go to meetings, and do that ‘volunteer’ work or other approved activity.
I don’t think many people in that siutation would/could be bothered to do it for small amount per hour. And don’t forget, if you had to spend money on things such as travel for interviews, paper, postage, and other things, those are not reimbursed.
But, in this crisis, they did away with thae asset counting, your husband/wife/partner can make up to something like $75,000 a year (people were complaining that they ‘couldn’t make it’ on that $45,000 limit), got rid of the volunteer/activity requirement AND
topped up the payment by an extra $750 a fortnight as the current unemployment maximum payment rate of something like A$550 a week (US$400) was all of the sudden “TOO LOW”.
Well I guess that the people who used to survive on that maximum amount rate per week somehow managed it and had to use up all their savings before they could get it were somehow ‘special’ and not in need of this extra money or reduced requirements for the past 25 years or so.
And this doesn’t come close to all the other money being thrown out by the cities, states, and federal government at people or businesses.
Payments to international students, grants of $25,000 and then was it $50,000 or $75,000 to businesses by the federal government, payroll tax relief to businesses by the states, more grants to busineseses by the states, rent relief to renters, top up payments by the federal government of $1500 per worker per fortnight to businesses to keep people employed, additional immediate asset write-offs for capital equipemnt by businesses (that is why there was the huge increase in vehicle purchases in June with many of them luxury cars – the neighbour who owns a real estate agency has three nice new cars), grants to this and that entity.
Oh, I almost forgot, people on the national pension were given a $750 one off payment in May and then another one in July. So they got the equivalent of 1 month top up of that unemployment pay or 1 fortnight of worker subsidy…………
Not to worry…
We are all going to drive our new Teslas to the unemployment office where we will rebuild our FaceBook homepage on our Iphones while waiting for our $600 supplemental check. It’s seems like a workable model for a superpower. Do Americans make anything but bombs and time wasters?
Don’t look down on our farmers. When America goes to hell, you’ll probably rely on them to survive.
What are you going to do with TikTok videos? Eat them?
You mean old farmers like Cargill and Archer Daniels Midland? They suck from the Department of Agriculture’s hind teat just as quickly as Wall Street would. They would raise their prices in a famine without batting an eye. Pardon me if I don’t kiss their butts.
I am talking about real farmers. Did you know America is self sufficient when it comes to food.
We won’t starve as long as supply lines don’t break.
And before anybody tells you there won’t be any hunger because “we” are self-sufficient in food, remember, if the above mentioned farmers aren’t growing profit they won’t be growing anything. Anything that can’t be sold will be destroyed.
There are no real farmers. The Midwest does not grow the food America eats, GMO feed for livestock, soybeans for export, corn for ethanol. Many of these farms are leased out by absentee owners. Pardon me but the state of American agriculture is symbolic of the divide in America. Very little difference between their business practices (including taxes) and those of the president.
Been in the cattle business for 30 years and have never taken government money. When USDA or local county agriculture suggest programs I ask them if they think I want to have my neighbors pay for my business with their tax money? Usually shuts them down.
“There are no real farmers.”
The family farm usually has a pig pen, a barn, and a huge vegetable garden.
They are usually big enough to take care of the immediate family on the farm and all their children and their families with milk, beef, pork, chicken, and vegetables.
Take a trip to rural North Dakota and see ‘real farmers.’
Very good point.
Regarding Monkey Business comment.
There are industrial farms for sure that supply the industrial grocery store food model. But there are lots of guys like our contributing friend RD Blakeslee who raises lots of food. Or other sustainable farmers like Joel Salatin. If it comes to it, these folks will increase their production if profit can be made.
snip: Joel F. Salatin is an American farmer, lecturer, and author whose books include Folks, This Ain’t Normal; You Can Farm; and Salad Bar Beef. Salatin raises livestock on his Polyface Farm in Swoope, Virginia, in the Shenandoah Valley. Meat from the farm is sold by direct marketing to consumers and restaurants. Wikipedia
Buy a spaghetti squash, scoop the seeds out, put them in the dirt about half an inch deep where there’s lots of sun and continual water, for example where an air conditioner or roof gutter drains etc.
I guarantee you will get plants, and if you soil is enriched with compost, or pee, or a little fish emulsion, you will get more squash to eat.
Growing food is not that hard, once you learn some basics. There is more information online, in 4K videos, than the smartest farmer ever knew. Practice makes perfect.
It is winter here in the magical land of Oz where the State government of Victoria has effectively shut down the city of Melbourne and quite a bit of its economic activity. Rules implemented to stop the spread of the virus were so well thought out that they were going to muck up the supply chains of the grocery stores and meat plants so they had to change those rules. (Change number 99 and counting)
The State Premier, who is an absolute idiot and megalomaniac, keeps saying you’ll be able to buy what you “need” – whatever that means – not necessarily what you “want”. So we want to buy for example, hamburger, but there isn’t any so we’ll have to buy bacon, if they have it, I guess.
(Went to the supermarket the other day and one was completely out of hamburger. The other was completely out of most vegetables.)
And we are soooooooooo smart here that with 1/4th of the country (Victoria) shut out from the rest of the country and the enitre country of Australia basically cut off from the rest of the world with the share market down about 1/2% today, the top two % gainers in the ASX 200 are travel companies!!
Anyway, getting back to food and the above travel, a lot of our vegetables and fruit in this country is picked by foreign workers specifically backpackers who come here on short terms visas to work and travel around the country.
Well guess what? Yep, there aren’t very many left here in Australia. Many left when the country started to shut down and of course none are being let in right now.
So we are going to have a big problem once spring and summer roll around. Big producers are already starting to moan about it. One article in the newspaper was spouting a possible 60% increase in the price of fruit and vegetables if something isn’t done.
One of the solutions would be for people to grow their own.
Well for fruit you can pretty much eliminate that as fruit trees take a while to start producing so if you haven’t planted them 3 to 5 years ago you are not going to get a decent crop.
(Luckily we are okay with 1 mature orange tree and three more young ones planted last year, 2 mature Japanese mikan trees which we are now picking and eating, 1 mature peach tree, 4 cherry trees (two 10 year old ones and two 5 year old ones) of which all will be producing full crops this year, and 3 apple trees of which two are mature). Hopefully we’ll have decent weather and no hail that strips the blossums from the trees this year.)
The other problem is that a lot of housing that has been built in and around Melbourne isn’t suitable for efficient growing of vegetables. Many of the housing units are on small blocks of land with very little open space suitable for growing things. It is hard to grow much on a 250 square meter block of land that is occupied by a townhouse and garage that doesn’t get the needed amount of sunlight. And forget about growing much of anything on a CBD balcony or an aparment building that doesn’t have one.
So basically we are in trouble and here in Victoria the other problem is the weather. I can’t remember having a ‘normal’ spring or summer for the past ten years.
This past spring and summer were horrible. Spring? What spring? It was cool, cloudy and we had too much rain. So what about summer? Yep – the same. Cool, cloudy, and a huge amount of rain. So much so that my spuds turned purple inside even though they were in raised beds. Then we had hail that stripped all but one cherry tree and the Japanese mikan.
The inflation stats showed the result of the crappy weather with a big increase in the price of fruit and vegetables over the past spring and summer.
Picked one whole apple from the new apple tree!
The year before we had a huge crop of apples, but that took watering almost everyday as we had a drought and really hot weather which was good for the eggplants and tomatoes, but not much else.
So…….hope we at least have decent weather this year or we are really, really in trouble.
Dairy farmers make 2/3 of their incomes from government subsidies. They are all on welfare. You pay twice for milk and cheese. Once in the store, and once again when you pay taxes.
the uninformed can search “EWG Farm Subsidy Database”
And most dairy farmers have gone broke, because the wholesale price of milk is so low.
Small family farms have been disappearing for years replaced by large commercial operations.
I think this is wrong, for three reasons:
1) Milk is subsidized – that means the store price is lower than it otherwise would be. Milk is typically cheaper than gasoline where I live. Low-cost dairy is a good thing, particularly for children, far too many of whom “make the mistake” of being born to poor families. The subsidy payment spreads the cost out among the full tax base, which isn’t necessarily a bad thing. Those healthy young kids are going to pay for your Social Security and Medicare subsidies in 20-30 years.
2) There’s an enormous public benefit in having a stable and reliable food supply. Agriculture is protected in most nations precisely to ensure that it doesn’t get too economically disrupted during, say, a pandemic, leading to mass starvation.
3) The subsidy may be a tiny fraction of the consumer price and still be a huge share of a farmer’s income. The net profit isn’t necessarily large as a small fraction of total revenue. If a farmer sells $1,000,000 in milk, and earns $60,000 after expenses, it would only require a 4% subsidy to be “2/3 of the farmer’s income”.
P.S. The whole “they are on welfare” argument could be applied to 3/4 of the nation’s population in one way or another. If you go there, you have to go there equally: Social Security, Medicare, highway subsidies, city subsidies (muni bond tax exemption, for instance), corporate welfare of all kinds… You can try to pick a bit of mud off your boots about dairy subsidies but you’re still standing in The Swamp.
Wisdom Seeker is describing a “welfare state”.
I live in an area where many farmers used to scoff at the idea of taking gvt subsidies. Townspeople scoffed at the idea of gvt grants for the city—“Never!” They were proud, “Look what we did without grants.”
Now it’s “We better sign up to get some too!”
My older siblings work for the gvt. During the Great Recession, they didn’t understand my plight… employers were laying off and not giving raises. Siblings’ response was “You can get a gvt job too! No one’s stopping you!” Haha…let’s all work for the gvt………….. my grandparents must be rolling in their graves.
This post won the internet for the day!
First, it was travel, vacation, retail industries. Now, look out for the rest of the service sector. For insurance, banking, medical, etc, the payments are going to increasingly stop coming from many people.
Make sure you add ‘uninsured motorist’ to your car insurance. I just found out about low mileage provisions also.
Add credit cards. People were already maxed out before Covid, as were all the major businesses (looking at you Boeing)
Recovery was fake after ’08, and they threw Trillions more debt at the problem.
Until the debt overhang is dealt with, this economy is not coming back, no matter what happens with Covid.
Health insurers reporting excess profits due to deferral of elective procedures – so yes, some medical personnel are working to exhaustion while many others may be underemployed.
Honest question. Who cares anymore? DJIA 27k, clearly unemployment doesn’t have any impact.
On the other thread, I said iPhone sales are up 8%. Other than that, there’s more evidence of people doing not too badly. Supposedly people creating YouTube contents were seeing their income from ads dropping, so a number of them started creating monthly subscriptions, and voila, plenty of people signed up.
I mean like seriously?
#BestRecessionEva continues. And of course, some people have been using their checks to do some trading on Robinhood. Just look at the pace of new Robinhood account creation.
At first, I thought you were being sarcastic about this stuff or trying to be funny. And it was very funny. But it appears you’re serious and have fallen off some kind of deep end.
You need to take your eyes off the stock market for a minute and look at what’s going on. The stock market is not the economy. There is a huge mess being balled up… in addition to the 20% of the labor force that is now claiming unemployment insurance.
It includes consumer loans and mortgages and rents that are not being paid anymore and that are now in some sort of deferral program instead of counting as defaults. But this money is owed. Instead of going into debt payments, it is being spent and consumed and is gone. These kinds of underlying distortions are now everywhere. To be sanguine about this is completely nuts.
Not to mention that some of the things that are being heralded as “disruptive” or “transformative” are going to be incredibly economically “destructive.”
Many office workers are not going to be asked to return to the office full time for at least 6 months, if not ever. I have a friend whose accounting firm has said that people will coming in two days a week, at most (with less time if approved the manager). That firm’s lease is coming up for renewal on 1/1, and it plans to reduce its office space by 40%.
So that means that the people who are NOT coming in to work three days a week are not buying their coffee on the way to work. They’re not buying lunch at the local deli. They’re not buying flowers for their wives from the guy who sells them at the corner. Oh yeah, and they’re not buying new work clothes, or dry cleaning the work clothes they do have. As commercial office space starts to shrink, guess what else shrinks? The jobs for cleaning, maintenance, and security people.
All of my friends’ companies currently have restrictions on business travel, and my CFO buddy (small firm) has said that they are thinking of changing the policies to make the changes permanent. Oh yeah, and he’s telling our auditors/consultants that no more “site audits.” If they’re going to sit at a computer anyway, they can do it from home.
So much of the hotel and travel industry caters to the business crowd, and without them, they won’t survive. And since airlines basically subsidize personal travel with last minute business seats purchased at much higher prices, many people won’t be able to afford to fly anymore. I suspect, once this all shakes out, that the days of $300/round trip flights from JFK to SFO are over.
In essence, we’ve compressed 10 years of change into 6 months. Maybe it’ll be better for the economy in the very long run, maybe it won’t, but I really don’t understand how people can bury their heads in the sand and think that all will be well in 6 months as if nothing happened. I really don’t
For better or worse, no matter how many people says the stock market is not the economy. It is being drummed into the heads of a lot of people by mainstream media that it is the economy. Just take a listen to your average news programming, there is constant barrage of DOW, S&P, and NASDAQ numbers.
And lots of people are magically thinking that the big 5, FAAMG (I know, doesn’t sound as good as FAANG) is the entire economy, even if in terms of employment, they account for less than 1% of the population.
Given the proliferation of Robinhood, one has to wonder how many people actually think they can replace their lost wages with day trading.
Wolf, are lenders eligible for some support if they are forbidden to evict?
This is a serious comment: all the unemployment is disruptive now, but in the long run it could be a Good Thing ™.
The US needs to onshore a lot of production that is critical to “essential” supply chains. The supply chain disruption from COVID illuminated all sorts of industries where domestic production is essential – either to national security, or to the medical system, or to food production and transportation.
We learned from this pandemic that we need to be far more self-sufficient in a pinch.
That new domestic industrial production will need a workforce.
Many of today’s unemployed ARE that future industrial workforce.
Work-from-Home is unleashing additional economic efficiencies. Those will be disruptive too, but again – there are opportunities at hand for that potential workforce. But only IF we’re willing to get back to taking care of ourselves as a nation, and stop trying to skate by with cheap stuff from overseas. That cheap stuff won’t be there in the next crisis.
It’s called FAANG or FANGMAN because with the help JPowell and team FANGMAN is sucking the cash out of the economy and into STAHZZZ!
The recovery is a complete sham in the US service based economy. I see closed retail stores everywhere, and I don’t know what the restaurants will do once the cold weather prevents out-door dinning. How about all those teachers who can’t teach, and the civil servants, who will be fired
because the tax base has shrunk? I watch empty trains go by, walk by empty movie houses and
dead bars. Any town dependent on tourism will die. A $1200 check to most people is a bad joke.
It would be interesting if Wolf could cover the hotel industry at some point.
Still this bad news is all good news for both stocks and precious metals. Stimulus will be unlimited and uncapped because it can be. Even I’m shocked at gold’s rally, and it seems they’re pricing in several 3 trillion dollar packages in the next year. Neither gold or stocks would be rising if yields were allowed to rise. But the heavy hand of the Fed on the curve makes that prospect a losing proposition.
My guess is the S&P ends the year at 3500, gold could easily go to $3000.
If every financial instrument is “going up,” it’s instead the dollar that’s going down under the weight of all this insane spending.
Gold? No, it Bitcoins you need to be investing in!
In my community the mall has only a few “dead” stores, the teachers are all going back to work in a hybrid model – kids still need plenty of attention – and the local supermarket is posting “help wanted” signs.
Some of the unemployment appears to be at least somewhat voluntary.
Some reduced unemployment represents parents staying home more to provide childcare until schools and daycares reopen.
It doesn’t seem to be quite as bad as the headlines say, unless you’re on the receiving end of the rent and debt payments that aren’t happening.
My understanding is that teachers in California have been getting paid and cannot claim unemployment insurance because they’re still employed, and would therefore not be included in these unemployment claims data.
If that’s the case why can’t tens of millions of Americans can’t pay the rent? Small businesses employ most Americans and they’re hurting.
So the restaurants closed down, but I didn’t care, because I don’t work in a restaurant.
Then the restaurant workers stopped buying new clothing, but I didn’t care when the clothing stores closed, because I don’t work in a clothing store.
Then the truckers lost their job because they no longer were shipping new clothing to the clothing stores, but I didn’t care…
This isn’t like a sudden plane crash, but like the slow painful and messy derailment of a 200 car coal train. It’s going to be months or even years before we hit bottom.
I question how long even the US government can keep on handing out trillions of dollars in stimulus. The “brain trust” that runs the company never expected this pandemic to last this long, but as far as I can see, it’s not over yet, not by a long shot. If we do get a “second wave” this winter, look out!
Hussman has done a lot of work on the mathematics of epidemics, and his latest post is quite interesting, dealing more with COVID than with economics: https://www.hussmanfunds.com/comment/mc200730/
He thinks the worst may be yet to come.
Then I realized it wasn’t about the stimulus checks at all as those people actually work and can resume working…
The real question is how long can the US Govt. continue to hand out entitlement checks to those that don’t work, haven’t worked in years or never really worked at all…
Are you talking about corporations ?
Pierce County, just south of Seattle, peaked at 45 infections per day during the spring lockdown. It fell to 25 and businesses were re-opened in a limited way. Public gatherings still limited. The daily infection rate is now 95.
Wall Street is doing just fine. In fact it’s never done better (thanks Jerome ‘I don’t care about bubbles’ Powell). So why would anyone in Washington think the economy isn’t awesome? Why would anyone in Washington think we need more stimulus? Can’t flyovers read stock indecices? Can’t you all see BLS will “fix” the unemployment thingy just like the Fed fixed inflation? Unless Mr Market throws another hissy fit, more stimulis isn’t guaranteed. Put another way: “We’re not even thinking about thinking…” – Jerome Powell. Those words should be emblazed upon the entry way of every every elective office in DC.
Apple is at $1.95 Trillion. Push it, push it. Unemployed need iPhones too.
The Capitalists did this to us. Don’t expect them to fix it.
That’s what I said ;)
Do people need a smartphone nowadays? The answer is unequivocally yes. Do people need BRAND NEW iPhones? BRAND NEW Apple wearables?
If everyone is working from home, not going to school and not going to restaurants or sporting events they might suddenly realize that they don’t need a smart phone or even a cell phone. A cheap pad running off your home wifi with VOIP might do everything you need. There might be a kind of smart-phone Minsky moment coming soon. Better dump the Apple stock before that happens
I’ve never owned a single smartphone in my life. My girlfriend qualified for an Obamaphone, but she already had an iPhone, so she made me use her Obamaphone. Why would I want to use a smartphone when my laptop has a bigger screen?
When the bank I use, in walking distance, closed the lobby to customers I needed a new smart phone. My old one could not download the bank app and I needed the app to deposit my retirement check. Yes the check still gets handed to me on the first. As I sold my car when I retired because I live a very short distance to light rail – can’t drive to the branch they kept open. Can’t get there by light rail. Wouldn’t use public transport now at all anyway.
So I bought a phone to deposit my checks, to pay my bills and buy what I needed. A good $250.00 phone.
Good luck finding a good price on anything used in m area. No one seems to be buying much new. Appliances, tools, cars etc.
You’re conflating rich, poor and newly laid off.
I see help wanted and we’re hiring signs everywhere. Problem is when one can earn $50-60K a year NOT working, those $10-20/hr jobs will stay unfilled. The lunacy of the $600/week federal UE benefits is why there are 30M people collecting. I had a slight hope the GOP would stay firm and get rid fo it, or at least bring it down to $200. But they caved. Long live UBI!
“Help Wanted Signs”???? What century is this? Who is still hiring walk-ins?
In the PHX area I have seen help wanted signs as well at some retail locations and actually some fast food and fast casual locations.
Safeway is, here in the Bay Area. Saw it when I stopped by to grab a couple items last week.
You apply online, but they were advertising the positions in the store doors.
We have just traveled the old ‘rt 66’ route, from Kingman AZ to Springfield IL, and have noticed ‘many’ help wanted signs in the windows, along the way. True, none looked to be large businesses, but small and local national chains.
Fav spot was Winslow AZ. Standing on the corner.
See any girls in flatbed Fords? ;)
Shhhhh! The Dude’s head is pounding and he hates The Eagles. Now where is that White Russian?
I believe he’s at the Hotel California. Such a lovely place; such a lovely face.
And North Texas hiring at Tractor Supply stores (declared essential business).
My ex-wife lives in SF…She claims this is the best economy ever….just like someone else commented: “For hire signs everywhere!”
But, according to her, “…nobody wants to work!”
She is of course retired so does not have to “….look for work” or reconnoiter those great jobs being offered.
Most restaurants in SF are still closed. They’re not hiring because they’re gone. Stores are closed other than essential stores. Many stores will never reopen. Many hotels are still closed. People are working from home, if they kept their jobs. The tourists are largely gone. The office towers are empty. Schools might not reopen. Apartments are emptying out. Traffic is astonishingly smooth. Sure, if you’re retired and have enough income or assets, life is good.
I do like SF better without all the tourists. Now it’s locals playing and exercising down by the water. An entirely different atmosphere.
If those jobs included housing, then people might be willing to apply.
Yes Wolf, in 2020, storefronts, restaurants, coffee shops, etc have help wanted signs. Every fast food joint has Help Wanted signs. At least where I live.
Wolf, I see plenty of business’ with “hiring now” signs. The plant I work at can’t find decent employees to drive a forklift starting at $17/hr, and thats in low cost of living Idaho.
Hars to find applicants that will pass the drug test in our area.
I’m expecting similar numbers when the UK’s furlough scheme ends in October. At least you have numbers to work with. The “boffins” at the UK’s Inland Revenue won’t give us any up to date figures. Still, Rishi’s given us a £10 meal deal (ex Goldman!!!!) so we have something to be thankful for.
Lost in the #s fog are the people working part time who want (need) full time employment and those (estimated before the Pandemic at 10 million people) who had been classified as work force drop outs. We’re in world of hurt, the production of real goods and services is dropping much more rapidly than in earlier recessions.
My prediction: end of year S&P 500 @ 1800 because, pretty soon, the Fed will have to stop pumping the stock and bond markets and deal with all the banking losses caused by the implosion of commercial real estate, the Saudi-Russian war on the Texas frackers, etc. etc.
Some kind of WPA program out there, they must be working on it right now. Corporations are not protecting workers. With adequate testing, faster results, they could open large parts of the economy. Just seems like they don’t want to. The governors cannot nationalize industry.
Contact tracers will have to wait until Border Patrol has finished up.
Once the $600/week welfare check from the Fed government stops the unemployment will drop dramatically as people who have been sitting home on their butts playing video games and watching movies on Netflix all day will have to go back to work and this will increase productivity and economic activity immediately. I talked a number of small business people in the DMV area here in the Washington DC area and they all say the same thing. They can’t even hire the people they need to operate. No one wants to work, I was in Home Depot the other day and I had to load 20 bags of mulch and topsoil myself right in the middle of the day, because all the loading personnel disappeared.
So what about the billionaires sitting on their butts and making billions from the largess of the Fed? Sorry about the exercise loading the topsoil.
Whenever I hear ‘no one wants to work’ it should be added’ at a low wage’. When I was a kid I got $1.60 per hour minimum wage and it’s equivalent today is conservatively $16.00 bucks an hour! That $16 will pull in a better than average employee in today’s environment even though the cost of living is in the high as a kite.
Same as when people say that immigrants are doing jobs “Americans won’t do.”
Americans will do any job if you pay them for it. If you mean “immigrants are willing to work for $5/hour under the table while Americans aren’t, then you’re right.
And two wrongs make one right? That’s probably the best we can hope for in current day America.
Was in Lowe’s a few days ago as well and it seemed like there were no employees. There was 1 cashier open. The line for self checkout was 10+ long. And it makes sense. Lowe’s pays what $12 an hour? That’s $480 a week. Federal UE pays $600/week plus state benefits which is anywhere form $300 to $800 depending on state. You’d have to be out of your mind to work for $480 when you can make $1000+ NOT working.
But it’s just a one-off opportunity!
You have to be laid off to get all these payments.
You can’t resign and then collect free money
And you lose it if you’re called back so they probably aren’t scheduling many employees because they haven’t gotten their COVID liability protection yet.
What the American worker is saying is “Pay me $3K a month and I will go to work.”
“And make as sure as possible that I won’t get Covid at work. I also want a full-time job with health insurance.”
“Then I will put down the remote and go to work.”
When you have a country used to complaining if a product costs more than china or some other slave nation labor force charges, good luck on that wish list.
I agree with the list, but a commitment to bringing that production home, and controlling borders will need to happen.
Nationalism became a dirty word….until globalism swept covid around the globe. Now they cheer the death of international travel, and closing of borders.
32 million people work in retail and hospitality, and that’s not even including some of the peripheral industries. Much of those industries are still largely dead.
Wow, here’s an idea. Set it up so people will either starve or be evicted, then those buggers will return to work. And they’d better have a smile on their face or forget about coming back.
$12 average hardware store job is 2 k per month. Then, there are those deductions and the uncomfortable fact the job really isn’t 40 hours per week. Remember, this is in 2020.
And what are those rental rates in the DC area?
There are employers and there are employers worth working for. I remember working away during a long recession. I was paid piece work as a percentage of what was billed to customer. One day my employer looked at my cheque and whistled. He said, “That’s what I like to see. if you’re making money I know we are”. This was in 1981 and my pay stub was for over 9 thousand dollars for one month. My previous employer laid me off Nov 24th so he wouldn’t have to pay Christmas and Boxing Day stat pay. And he wondered why we unionized? The non-union piece work operation was awesome and I worked my ass off for those guys because they shared the earnings and treated us with respect. They were in business for over 40 years so they obviously knew something about human nature. They finally shut down when they were in their 70s and felt it was time to retire.
Those shitty Home Depot jobs suck, to be honest. Compare it to any Costco, where people are paid a decent dollar. Night and day.
12 dollars per hour is 2k gross but more likely 1,550 net per months.
With apt rents at 1000+ per month, expect to be greeted with more than just smiles and yes, some may never be coming back.
Well, as you loaded that mulch you should have been pleased, as you were living your dream and not ‘sitting on your butt’.
Heath Care workers were one exception here in the DMV. They did their jobs with a degree of professionalism I’ve never witnessed before. When the Governor lifted the stay at home order they were out in full force taking care of people with elective procedures that had been postponed. They kept my family healthy so that we could get back to work. I wish I could say the same for the educational establishment here. They have failed the taxpayers who pay their salaries, they have failed our children. After Hurricane Andrew devastated south Fla in 1992 they putting opening schools as the number one priority to help restore so normality to the community. It worked.
You should really look into how school outbreaks cause the Israeli success story to go down the tubes.
Florida is hip-deep in the storm surge but sure let’s send the teachers out into it without even floatie.
I imagine it’s only a matter of time before pensions start to get hit. That’ll rattle some cages…like mine.
The stock market is meaningless at this point as a measure of economic health. Virtually every growth stock that has been flying is more overvalued than at any other time in the history of the market. Can anybody imagine Tesla being where it is but for the intervention of the FED and the day traders and algorithms driving its price up? Sooner or later this is all going to end very badly. Even the Fed won’t be able to stop what is coming
We need to outsource all that mulch loading to China, stat. Bring back good jobs, like making Chinese-made iPhones.
40 percent of the US population does not work.
131 million of the roughly 330 million US citizens are sitting around
waiting for someone to provide for them.
32 million involuntarily unemployed is nothing in comparison to the 131 million voluntarily unemployed that no one talks about.
We are adding trillions in debt per month to support 131 million deadbeats who sit around bitching that those 32 million should be doing everything possible to support them.
The US will soon be adding 1 trillion per month to its debt obligations to support its deadbeat population.
End entitlements/pensions any Govt. provided benefit and watch how quickly the US economy rights itself.
What percentage of that 40% are elderly or children?
Earn your keep. You live in a 6 bedroom house, rent out 4 of the rooms and quit making the rest of us pay for your mortgage and healthcare expenses.
The homeless crises in the US could end overnight, just take away
entitlements and let economic realities create solutions.
Sounds like a good idea.
Can we put a couple of homeless people in your living room?
Lee, you are missing the point.
We just need to take away the handouts you are receiving from the Govt. and then let people like you decide how they want to respond.
Take out entitlements and let economics realities create solutions.
How many of those elderly are retired and/or disabled and are relying on Social Security and Medicare benefits they earned during their working years? Are you saying we should dump them out on the street?
These aren’t entitlements – people paid in. But sure – watch big pharma grow without medicare/medicaid or landlords with tenants without social security or the PBGC just for starters.
Just want to toss out there that a couple million of the unemployed could be high school and college students who got stuck at home for the summer, but will be back in school (sort of) this fall.
Another chunk of the unemployed payroll will be people who figured out how to collect benefits while working quietly for cash, rent or other untraceable and untaxable rewards.
Those students probably don’t qualify for unemployment insurance and would therefore not show up in this data here. Tomorrow’s jobs report might pick them up though.
The extra 600 supplemental UI has nothing to do with anything.
It is already being fazed out and yet so many WS slobs continue to whine about it as if they are above it all.
Focus on the big picture. The US will soon eclipse 1 trillion in deficit spending per month. Stop blaming everyone else, this is your debt, what are you going to do about your debts?
I am tired of hearing from yahoo’s that claim to be debt free, loaded to the gills with ammunition, whatever…
The US Debt is your debt and you will pay it!
Dick Cheney said deficits/debt doesn’t matter.
He was right……they don’t.
I have found that the folks who get most riled up/outraged about deficits/debt seem to think it all needs to be repaid in about 35 years…..you know, like their private household.
The U.S. government is an immortal being….it debts can be repaid over five or six centuries. Thus it is all perfectly manageable.
Dick Cheney was not right about anything.
I just read Chipotle is going to hire 10k workers, Dunkin Donutes will hire 25k, and Papa Johns said they will hire 10k. I guess fast food is doing well.
Those new hires might have something to do with the covenants on the corporate loan packages. Real or implied….
I think you might be right. Look at Sweden. They’ve been heartily derided by the mainstream press for their approach to the pandemic, but it appears they might have been right after all.
I’ve been reading the comments and from what I see things are really uneven in the economy.
1) If you have a good chunk of money invested in the right sectors you are killing it;
2) If you have good skills and experience (whether tech, landscaping, renovations, …) You are killing it;
3) If you have skillz (Barber, salon, manicure, pedicure), it depends – if you have a retail shop it could be challenging. If you work on the side and provide private services you could be doing well;
4) Retail just plain tough in many sectors but some seem to be doing well;
5) Big on-line retailers killing it;
6) Automotive probably suffering from what I can see; Why buy new if your car is sitting on the driveway? Why have 2 cars if you’re working from home?
I could go on but I won’t….
I’m curious what would happen to 16.27 million of “Federal UI claim/PUA” after this week, since $600/week Federal benefit has expired as of 7/31, IF Congress fails to extend it in some form.
Will 16.27 million continued claims just “disappear” or how’s that going to work?
The $600 a week has nothing to do with the count of unemployment claims. It comes on top of the regular benefits. Free gift, so to speak. What is counted here are the people claiming unemployment insurance.
Okay. Thank you.
I somehow misunderstood that PUA is only related to the $600 benefit.
Now I see those who are on PUA will continue to receive the UI benefit calculated based on state laws up to 39 weeks.
“The PUA program provides up to 39 weeks of benefits, which are available retroactively starting with weeks of unemployment beginning on or after January 27, 2020, and ending on or before December 31, 2020. The amount of benefits paid out will vary by state and are calculated based on the weekly benefit amounts (WBA) provided under a state’s unemployment insurance laws. Under the CARES Act, the WBA may be supplemented by the additional unemployment assistance provided under the Act.”
Looking over these comments… just a few observations from the front lines of the labor picture:
Consider how easy it has become to automate key business operations like sales, marketing, logistics, customer service, finance, accounting… when you call in, you don’t speak to a human anymore. Software is eating the world, quoting Marc Andreessen. Amazon is a software business. Uber is a software business. Facebook runs on software. Today, just a few software engineers operate all of these functions. Where hundreds of employees in sales and marketing were needed to run those operations, just 20 or 30 software specialists are needed. So 200 or 300 workers have become 20 or 30, just in the past decade or two.
Consider the role of Cloud Infrastructure Engineer. It’s a great job, great pay, up to $150,000 per year. College degree “or equivalent” say the job ads. One of these Cloud Infrastructure Engineers can do the work of several engineers, the ones we used to employ when servers were physical boxes in the “server closet”. Today, one engineer can manage thousands or even millions of cloud servers with tools like Kubernetes. Just one engineer.
Consider bridge toll takers. I live here in the San Francisco Bay Area where we have 8 toll bridges. Just a few years ago, all these bridges employed hundreds of human toll takers. It’s a good job, steady pay, you even wear a badge. You help people with roadside emergencies. Considered “Essential workers” too.
Today, the number of toll takers employed is zero. The job is essentially completely automated out of existence — just in the last 5 to 7 years. Of course, there are a few people employed to make sure the automation runs correctly, and they fix any problems. But just a handful are really ever necessary. Whereas, hundreds of human toll takers used to have jobs.
These are just some of the examples that might help explain the fact that 33 million unemployed (highest ever in the US) won’t likely ever work again.
The US (and other wealthy, developed nations) are rapidly approaching a future where well over 50% of the population lacks the skill set to do anything useful at any price.
I think the $600 UI topup we’ve had in place is going to morph into a form of UBI for the un-employable. Endpoint is a top-to-bottom rethink of capitalism as we have previously known it. A system where over 50% of the population has zero economic value will not be a sustainable model, IMO.