US unemployment rate falls to 7.9% in last look at jobs market before elections | Business | The Guardian

Scariest jobs chart ever, H/T Calculated Risk

The monthly jobs numbers came out, and it missed expectations.

This is not surprising. The stimulus ended 2 months ago, and there is not a lot to move the economy along:

Hiring gains slowed sharply heading into the fall as more layoffs turned permanent, adding to signs that the U.S. economy faces a long slog to fully recover from the coronavirus pandemic.

Employers added 661,000 jobs in September, the Labor Department said Friday. The increase in payrolls showed the labor market continued to dig out of the hole created by the pandemic, but at a much slower pace than over the summer.

The U.S. has replaced 11.4 million of the 22 million jobs lost in March and April, at the beginning of the pandemic. Job growth, though, is cooling, and last month marked the first time since April that net hiring was below one million.

………

Other signs of a slowing U.S. recovery include a drop in household income at the end of the summer and smaller gains in consumer spending, the economy’s main driver.

The unemployment rate fell to 7.9% in September from 8.4% the prior month. Though the jobless rate is down sharply from a pandemic high of near 15% in April, last month’s drop partially reflected an increase in permanent layoffs and more people leaving the labor force. That could stem from more workers quitting their job searches due to weak employment prospects or child-care responsibilities.

………

Large corporate layoffs are sweeping across the U.S. Walt Disney Co. earlier this week announced permanent layoffs for 28,000 theme park workers who were previously on temporary furlough. American Airlines Group Inc. and United Airlines Holdings Inc. will proceed for now with a total of more than 32,000 job cuts after lawmakers were unable to agree on a broad coronavirus-relief package.

The recent layoff announcements aren’t reflected in the September jobs report, which includes data gathered in the first half of the month.

………

The number of unemployed individuals saying their layoffs were temporary declined in September, which could reflect more people returning to work. Meanwhile, the number of workers who saw their layoffs as permanent rose for the month, a sign workers may be in for long spells of unemployment.

One of the reasons that the unemployment rate is down is that the denominator is shrinking, as people become discouraged, or leave the market because of the unavailability of child care.

To my mind, the employment-population ratio shows a better picture, and the picture is less rosy.

This is the last monthly jobs report before the elections, and I’m pretty sure that both sides will claim that the numbers support them.

Another Thursday, More Bad Economic News

Unemployment claims remained largely unchanged in the last week, which is to say that it’s still about 30% more than any other report that was not in 2020:

New applications for unemployment benefits in the U.S. fell slightly last week but remained between 800,000 and 900,000 for the fifth straight week, reflecting a labor-market recovery that is losing momentum.

Weekly initial claims for jobless benefits fell by 36,000 to a seasonally adjusted 837,000 in the week ended Sept. 26, the Labor Department said Thursday. In a positive sign, the number of people collecting unemployment benefits through regular state programs, which cover most workers, decreased by 980,000 to about 11.8 million for the week ended Sept. 19. That was the lowest level since March.

The totals for unemployment applications and payments remain well above pre-pandemic peaks but are down significantly from this spring, when the coronavirus pandemic and related shutdowns caused both measures to rise to the highest levels on record back to the 1960s.

………

Thursday’s data was complicated by California pausing the processing of new claims for two weeks. State officials said last month they needed to clear a backlog of nearly 600,000 Californians who have applied for benefits more than 3 weeks earlier, and about 1 million cases where individuals received payments but subsequently modified their claim and are awaiting resolution.

The U.S. Labor Department said Thursday that this week’s national report reflects California’s level during the last week before the pause. Data will be revised at a later date, the government said.

Of more significance, it appears that household income is cratering, which means that the reason that the drop in unemployment claims are flattening out might be that the much touted “recovery” is running out of steam:

A drop in household income and persistently high layoffs are threatening to further slow the U.S. economic recovery, which already appears to be losing momentum as the pandemic continues.

Personal income—what households received from salaries, investments and government aid—fell 2.7% in August as enhanced unemployment checks shrank, the Commerce Department said Thursday. Meanwhile, another 837,000 workers filed for unemployment compensation last week after being recently laid off, the Labor Department said. In total, nearly 12 million workers are receiving unemployment compensation through regular state programs.

The level of weekly jobless claims shows layoffs remain persistent in some industries, and more companies announced cuts this week. American Airlines Group Inc. and United Airlines Holdings Inc. told employees they will go forward with more than 32,000 job cuts Thursday, after lawmakers were unable to agree on a broad coronavirus-relief package. Insurer Allstate Corp. on Wednesday said it planned to lay off 3,800 employees. Walt Disney Co. on Wednesday announced permanent layoffs for 28,000 theme-park workers who were previously on temporary furlough.

The economy up to now has rebounded more quickly than many economists thought. But with federal aid fading and job growth slowing, consumer spending—the key driver of economic activity in the U.S.—could weaken. Economists believe the recovery is entering into a modest and more grinding phase.

We are coasting on the now expired stimulus and supplemental unemployment payments.

Friday’s jobless rate will be interesting, as will the next few weeks of economic data.

Initial Claims Remain at Horrific Levels

Initial unemploument claims rose by 4,000 to 870,000

So, still above any weekly claims level that was not in 2020.

If you are wondering why the steep drop and then a flattening out, probably because the aid programs stopped:

The number of applications for unemployment benefits has held steady in September at just under 900,000 a week, as employer uncertainty about the economic recovery six months into the coronavirus pandemic continued to restrain hiring gains.

Jobless claims increased slightly to 870,000 last week from 866,000 a week earlier, according to Thursday’s Labor Department report. The totals remain well above pre-pandemic peaks but are down significantly from nearly seven million in March.

The labor market has added jobs in the prior four months after steep declines in employment at the beginning of the pandemic, helping bring down the jobless rate to 8.4% in August from near 15% in April. But the pace of gains has slowed recently, and persistently elevated jobless claims in September point to continued cooling in the jobs market.

This is not a good economy.

This

Dean Baker makes a very good point: CEOs Maximize CEO Pay, Not Shareholder Returns

They act in their own self interest, not those of the company, which is why the insane pay arrangements for senior executives do not result in increased performance for any task involving thinking, which we have known for years, and was demonstrated by Dan Ariely over a decade ago:

It is a cult among policy types to say that CEOs maximize shareholder returns, as in this NYT piece. This is in spite of the fact that returns to shareholders have not been especially good in the last two decades. And, this is even though returns were boosted by a huge corporate tax cut in 2017 that increased after-tax profits by more than 10 percent, other things equal.

There is considerable evidence that CEOs do not earn their \$20 million pay, in the sense of providing \$20 million in additional returns to shareholders, compared to the next schmuck down the line. This matters in a big way because CEO pay influences pay structures throughout the economy. If CEOs got paid 20 to 30 times the pay of ordinary workers, like they did in the 1960s or 1970s, or around \$2 million to \$3 million a year, the next in line execs would likely get around \$1.5 million and the third tier corporate execs would get in the high hundreds of thousands. That is a contrast from today when the CFO and other top tier execs might get close to \$10 million and the third tier can easily make \$2-\$3 million.

Preach it, Brother.

Analogy of the Day

The US Economy is Having a Wile E Coyote Moment

The lead paragraph says it all:

In the well-known Looney Tunes cartoon, Wile E Coyote regularly runs off a cliff in pursuit of the Road Runner and is suspended in mid-air temporarily. When he looks down and realises his predicament, he falls into the canyon below. In real life, US consumers and businesses have just run straight off a cash cliff, now that extra federal assistance to small companies and unemployed workers has ended.

We are screwed, particularly when the heating season begins, and humidity drops, and viral infectivity increases.

Only Took 43 Years

The Federal Reserve has been required to place equal weight on full employment and prices stability since the passage of the Humphrey-Hawkins act in the late 1970s.
It hasn’t. Instead, it has gone for real unemployment while fighting imaginary inflation.

It only took a few decades, but now the Fed has decided to change its policy, and so will no longer engage in monetary tightening just because unemployment is low, they will wait for actual inflation to show up:

In a historic break with decades of policy, the Federal Reserve announced Thursday that it will no longer deliberately keep millions of Americans unemployed at all times.

America’s central bank has a dual mandate — to promote full employment and price stability. These two aims were long presumed to be in tension: If unemployment fell too low — such that there was no slack in the labor market (i.e., no reserve of jobless workers for employers to draw on) — then workers would gain the upper hand on their bosses and demand wage gains in excess of their own productivity, which would force companies to raise the prices of their goods to keep up with their labor costs, which would then cause workers to demand still-higher wages to keep up with prices, in a vicious inflationary cycle.

For this reason, the Fed defined “full employment” as an unemployment rate significantly above the level one would expect from mere job-switching frictions. And when the labor market tightened beyond the level the Fed deemed conducive with price stability, it would start raising interest rates — to choke off credit creation, slow growth in the money supply, and thus, deliberately keep Americans out of work — even if inflation had not yet exceeded its official target.

………

In the aftermath of the Great Recession, the inequity of the central bank’s longtime prioritization of avoiding theoretical inflation — over the certain unemployment of millions of workers — became more conspicuous. The Fed’s official inflation target is 2 percent. But for a variety of reasons — among them, the tepid pace of the recovery and the weak bargaining power of American workers in an age of trade-union decline — price growth remained stubbornly below those levels, even as the central bank kept interest rates near zero. Nevertheless, despite the absence of any hint of excessive inflation, the Fed began raising interest rates in 2015, on the grounds that the U.S. could not sustain an official unemployment rate of below 5 percent without triggering a wage-price spiral.
………

Progressive (and a few growth-oriented conservative) economic-policy wonks pushed back on this move. Then, when a Republican president with a penchant for easy money came to power — and the GOP’s inflation hawks went dutifully silent — Trump’s appointed Fed chair, Jerome Powell, adopted a more accommodative stance. And America proceeded to learn that its economy could not only abide a 3.6 percent unemployment rate without suffering runaway inflation, but that such a rate wasn’t even sufficient to bring inflation to its target level of 2 percent. The theorized hard trade-off between unemployment and price stability did not appear to exist, which meant that America’s finest economic minds had been slowing growth and killing jobs for no good reason.

………

(1) The Fed will no longer presume that it knows what the maximum level of employment in the U.S. economy is, and will therefore refrain from raising interest rates until there are clear signs of excessive inflation.

(2) The Fed will not treat its 2 percent inflation target as a maximum, but rather as the average rate it wishes to promote over an extended period of time. Which is to say: If inflation runs a bit below that target for years on end, then the Fed will tolerate inflation a bit above that target for a few years after.

I am not surprised that the Fed Chair who did this is not an economist.

Only in America

I came across two stories within minutes of each other, the first reported that FHA mortgage delinquencies have hit record levels, and the second story reveals that home builder confidence in the US has hit a record high

This is a recipe for disaster:

Federal Housing Administration mortgages — the affordable path to homeownership for many first-time buyers, minorities and low-income Americans — now have the highest delinquency rate in at least four decades.

The share of late FHA loans rose to almost 16% in the second quarter, up from about 9.7% in the previous three months and the highest level in records dating back to 1979, the Mortgage Bankers Association said Monday. The delinquency rate for conventional loans, by comparison, was 6.7%.

Millions of Americans stopped paying their mortgages after losing jobs in the coronavirus crisis. Those on the lower end of the income scale are most likely to have FHA loans, which allow borrowers with shaky credit to buy homes with small down payments.

For now, most of them are protected from foreclosure by the federal forbearance program, in which borrowers with pandemic-related hardships can delay payments for as much as a year without penalty. As of Aug. 9, about 3.6 million homeowners were in forbearance, representing 7.2% of loans, the MBA said in a separate report. The share has decreased for nine straight weeks.

Note that even though interest rates are low, Fannie Mae and Freddie Mac have implemented a
0.5-percentage-point “adverse market” fee to account for the increase risk of default, but home builders are confident.

My guess is that they are expecting a taxpayer bailout of some sort:

U.S. home builder confidence rose for a third straight month in August to match its highest level ever as record-low interest rates spur buyer traffic, data released on Monday showed in the latest indication the housing market is a rare bright spot in the economic crisis triggered by the coronavirus pandemic.

Jobless Thursday, and………

Not only did initial jobless claims go up for the 2nd week in a row, but the 2nd quarter GDP numbers show an annual 32.9% decline.

These numbers are not just the worst for the US since modern statistics started being collected after World War II, these numbers are, “US investors are assisting with privatizing the economy,” bad:

The economy contracted at a record rate last quarter and July setbacks for the jobs market added to signs of a slowing recovery as the country faces a summer surge in coronavirus infections.

The Commerce Department said U.S. gross domestic product—the value of all goods and services produced across the economy—fell at a seasonally and inflation adjusted 32.9% annual rate in the second quarter, or a 9.5% drop compared with the prior quarter. The figures were the steepest declines in more than 70 years of record-keeping.

Meanwhile, the Labor Department’s latest figures on unemployment benefits suggested the jobs market was faltering. The number of workers applying for initial unemployment benefits rose for the second straight week—by a seasonally adjusted 12,000 to 1.43 million in the week ended July 25—after nearly four months of decreases following a late-March peak. The number of people receiving unemployment benefits increased by 867,000 to 17 million in the week ended July 18, ending a downward trend that started in mid-May.

This is unbelievably grim.

Quote of the Day

In a Collapsed State, the Market Rules to the Exclusion of Any Other Concerns

Specifically, the author maintains that the free market fundamentalism of the United States will lead to an societal collapse:

………

To illustrate his point, [journalist Robert Kaplan, author of “The Coming Anarchy”] Kaplan traveled to the West African nation of Sierra Leone. In the thick of a decade-long civil war, Sierra Leone was the poster child for failed states. The term had come into general use after 1992, when it appeared in a Foreign Policy article written by two U.S. State Department officials, Gerald Helman and Steven Ratner (not to be confused with Steve Rattner, a controversial figure involved in the 2008 economic bailout).

………

Against this backdrop, Kaplan described Sierra Leone, a country once known as the Athens of West Africa, as a bellwether for the “withering away of central governments, the rise of tribal and regional domains, the unchecked spread of disease, and the growing pervasiveness of war.” While critics charged Kaplan with trading in racist tropes, he made it clear that this Hobbesian future was not confined to any single continent or country. “West Africa’s future, eventually, will also be that of most of the rest of the world,” he predicted.

What Kaplan missed was the organization behind Sierra Leone’s apparent chaos. For ordinary citizens, wartime Sierra Leone was chaotic, but the economic system was organized, if brutal. Sierra Leoneans called it the Sell Game: rival armies looting the countryside while vying for control of the country’s illicit diamond trade.

Sierra Leone’s Sell Game exemplifies state failure’s central characteristic, as the term has evolved. In the words of Robert I. Rotberg, former director of the Program on Intrastate Conflict, Conflict Prevention, and Conflict Resolution at Harvard’s John F. Kennedy School of Government, in a collapsed state, “the market rules to the exclusion of any other concerns.”

………

Yet the prescience of Kaplan’s Big Idea is truly remarkable. As Kaplan predicted in 1994, West Africa in the 1990s was a dire warning of global trends now hitting our shores. Not the amputations—although who knows how far things will go—but the withering of the nation-state, the rise of tribalism, big man politics, and above all, the Sell Game.

Welcome to the Failed State of America.

I tend to refer to Neoliberal policies as, “Eating our own seed corn,” but this seems to be a bit more intellectually rigorous.

Acknowledging what the Corona Virus has Revealed

Computer technologist and cyber-security expert Bruce Schneier makes a very good point, that extremely efficient systems are brittle, because maintaining reserves, or accounting for relatively rare events is inefficient, and unprofitable, and so will not be done by a rational actor, since it is a waste of resources.

Until it isn’t, which is when the rest of us are expected to bail them out:

For decades, we have prized efficiency in our economy. We strive for it. We reward it. In normal times, that’s a good thing. Running just at the margins is efficient. A single just-in-time global supply chain is efficient. Consolidation is efficient. And that’s all profitable. Inefficiency, on the other hand, is waste. Extra inventory is inefficient. Overcapacity is inefficient. Using many small suppliers is inefficient. Inefficiency is unprofitable.

But inefficiency is essential security, as the COVID-19 pandemic is teaching us. All of the overcapacity that has been squeezed out of our healthcare system; we now wish we had it. All of the redundancy in our food production that has been consolidated away; we want that, too. We need our old, local supply chains — not the single global ones that are so fragile in this crisis. And we want our local restaurants and businesses to survive, not just the national chains.

We have lost much inefficiency to the market in the past few decades. Investors have become very good at noticing any fat in every system and swooping down to monetize those redundant assets. The winner-take-all mentality that has permeated so many industries squeezes any inefficiencies out of the system.

This drive for efficiency leads to brittle systems that function properly when everything is normal but break under stress. And when they break, everyone suffers. The less fortunate suffer and die. The more fortunate are merely hurt, and perhaps lose their freedoms or their future. But even the extremely fortunate suffer — maybe not in the short term, but in the long term from the constriction of the rest of society.

………

The market isn’t going to supply any of these things, least of all in a strategic capacity that will result in resilience. What’s necessary to make any of this work is regulation.

………

The government is the entity that steps in and enforces a level playing field instead of a race to the bottom. Smart regulation addresses the long-term need for security, and ensures it’s not continuously sacrificed to short-term considerations.

We have largely been content to ignore the long term and let Wall Street run our economy as efficiently as it can. That’s no longer sustainable. We need inefficiency — the right kind in the right way — to ensure our security. No, it’s not free. But it’s worth the cost.

Our economy has been an embrace of the efficient over any other possible good for decades, and now we are reaping he whirlwind.

Tweet of the Day

I really appreciate this very, very generous profile from @petercoy but I do want to disagree with the headline, which is reinforced by the article. I do have a credential- the intersection of my whiteness, maleness and cisness. 1/N https://t.co/h9YcdjFDkK

— Nathan "Donate to @survivepunishNY" Tankus (@NathanTankus) July 2, 2020

It’s good to see someone acknowledge their own privilege in such a straightforward and honest way.

Correlation Is Not Causation, But………

JP Morgan has commissioned a study showing that increased spending on restaurants correlates to increased Coronavirus cases.

This indicates that the hospitality industry may need to be shut down once again:

A surge in restaurant spending appears to predict a surge in coronavirus cases weeks later, a new JPMorgan study found.

The firm analyzed spending by 30 million Chase credit and debit cardholders and coronavirus case data from Johns Hopkins University, and found that spending patterns from a few weeks ago “have some power in predicting where the virus has spread since then,” analyst Jesse Edgerton wrote Thursday. The study found that the “level of spending in restaurants three weeks ago was the strongest predictor of the rise in new virus cases over the subsequent three weeks,” in line with the firm’s recent studies using OpenTable data.

Notably, JPMorgan found that ‘card-present’ transactions in restaurants (meaning the person was dining in, not ordering online) were “particularly predictive” to a later spread of the virus.

And interestingly, the JPMorgan study also found that increased spending in supermarkets correlated to a slower spread of the virus. Analyst Edgerton wrote that the correlation hints that “high levels of supermarket spending are indicative of more careful social distancing in a state.” The firm pointed out that as of three weeks ago, supermarket spending in states like New York and New Jersey, which are now seeing a decrease in cases, was up 20% or more from a year ago, whereas states now seeing a surge like Texas and Arizona saw supermarket spending up less than 10%.

………

Indeed, states that reopened restaurants and bars earlier on are seeing surges in cases. On Friday, Texas Gov. Greg Abbott said that, “At this time, it is clear that the rise in cases is largely driven by certain types of activities, including Texans congregating in bars,” as the state announced it would be closing bars and reducing capacity at restaurants. New cases in Texas have risen over 5,400 as of Thursday. Florida, which has been criticized for reopening quickly, saw new cases spike to nearly 9,000 on Friday, also announcing it will reinstate some restrictions, Halsey Beshears, the secretary of the Florida Department of Business and Professional Regulation, said in a tweet.

I think that a lot of  “rebound” in the May unemployment report was a recovery in the hospitality industry, and it looks like that is going to reverse.

Professor Pangloss is Usually Wrong

Andrew McAfee, a “technologist” at MIT, wrote a book, More From Less showing that the US use of natural resources has declined even as its GDP has increased, implying that growth can continue unencumbered without any economic cost.

The problem with this is that his book studiously ignores the raw materials that go into imported goods, which refutes the hypothesis:

Scientists are increasingly concerned about the impact that excess industrial activity is having on our planet’s ecosystems. Our pursuit of perpetual economic growth is driving ever-increasing levels of material extraction, which is causing a wide range of ecological problems: deforestation, soil depletion, habitat loss, and species extinction. The crisis has become so severe that last year more than 11,000 scientists from over 150 countries published an article calling on governments to shift toward “post-growth” economic models, focusing on human well-being and ecological stability rather than constant expansion.

But some figures have rejected this idea and are rallying around a different narrative altogether. In a book published last October titled More From Less, the Massachusetts Institute of Technology-based technologist Andrew McAfee argues that we can continue to grow global GDP indefinitely while reducing our ecological impact at the same time—and all without any structural, much less revolutionary, changes to the economy or society.

At the core of McAfee’s argument is his analysis of the U.S. economy. He claims that U.S. consumption of resources has remained steady or even declined since the 1980s, while GDP has continued to rise. In other words, the United States is “dematerializing,” thanks to increasingly efficient technology and a shift toward services. The same thing has been happening in other high-income nations, he says. This proves “green growth” can be achieved; rich countries are showing the way, and the rest of the world should follow suit.

………

There’s only one problem: McAfee’s argument is based on a fundamental accounting error. McAfee uses data on domestic material consumption, which tallies up the resources that a nation extracts and consumes each year. But this metric ignores a crucial piece of the puzzle. While it includes the imported goods a country consumes, it does not include the resources involved in extracting, producing, and transporting those goods. Because the United States and other rich countries have offshored so much of their production to poorer countries over the past 40 years, that side of resource use has been conveniently shifted off their books.

Oops.

One Word Makes a Big Difference

The head of Fidelity International, Anne Richards, is predicting a global insolvency crisis.

The important thing here is that she says that there will be a SOLVENCY crisis, and not a LIQUIDITY crisis.

This is important.

If you are illiquid, you lack the necessary cash to make payments right now, but if you are insolvent, you owe more than your assets.

If you are insolvent, you are broke, bankrupt, or busted.

Absent a bailout or buyout (usually at a discount) an insolvent operation is done.

It is much worse than a liquidity crisis, and it’s what happens when corporations burn through their assets buying up their own stock instead of investing in the business.

If she is right, and I’m inclined to believe that she is, his is going to get ugly, with zombie companies holding back the econom for years.

It’s Official, We are in Recession

What’s more, it began in February, before the lock-downs started:

The U.S. officially entered a recession in February, marking the end of the 128-month expansion that was the longest in records reaching back to 1854.

While Monday’s announcement by the National Bureau of Economic Research didn’t come as a surprise to economists, the group typically waits until a recession is well under way before declaring it has started.

………

The nonpartisan Congressional Budget Office said last week the U.S. economy could take the better part of a decade to fully recover. Gross domestic product will likely be 5.6% smaller in the fourth quarter of 2020 than a year earlier, despite an expected pickup in economic activity in the coming months, and the unemployment rate could still be in double digits by the end of the year, the CBO said.

………

The NBER’s recession-dating committee looks at gauges of employment and production, as well as incomes minus government benefits, to determine when a recession has begun. It doesn’t use the rule of thumb common elsewhere in the world: two or more quarters of declining real gross domestic product.

The NBER considers February the peak of the business cycle, when the expansion ends and the recession begins. The month in which the economy reaches its trough and activity stops contracting marks both the end of the recession and the start of a new expansion. The committee doesn’t comment on how long the recession may last.

Even if this is a strong recovery, it’s going to take years, because the average consumer is going to need years to recover.

We Are F%\$#ed

The dead rising from the grave! Human sacrifice, dogs and cats living together mass hysteria!

The Atlanta Fed’s real time estimate of GDP just came out, and while there are plenty of caveats, they are estimating a decline in GDP of -52.8%.

Even the more mainstream estimates shown in the figure are end of the world stuff, but their estimate is a Stay Puft Marshmallow Man moment:

Ok, this is now getting a little scary:

The real time GDP running estimate of US economic activity is half of what it was 3 months ago. As of June 1, the Atlanta Fed is nowcasting that economic activity in the United States, as measured in GDP, is minus 52.8%.

Given the extent of the collapse in demand that has accompanied quarantines and shelter-in-place orders, this is not a surprise. Still, when you see the number in print, it still has the capacity to shock.

Yeah, it has the capacity to shock.

Of Course They Aren’t………

Trump and his Evil Minions are refusing to release economic projections for the upcoming quarter, probably because they have run the numbers, and they are unbelievably f%\$#ing grim.

I am not sure if this is reelection campaign thing, or they are just worried about the tantrum that Trump would throw if they released the data.

It really does not matter what reason they have for this, it’s a thoroughly cowardly move:

White House officials have decided not to release updated economic projections this summer, opting against publishing forecasts that would almost certainly codify an administration assessment that the coronavirus pandemic has led to a severe economic downturn, according to three people with knowledge of the decision.

The White House is supposed to unveil a federal budget proposal every February and then typically provides a “mid-session review” in July or August with updated projections on economic trends such as unemployment, inflation and economic growth.

Budget experts said they were not aware of any previous White House opting against providing forecasts in this “mid-session review” document in any other year since at least the 1970s.

………

“It gets them off the hook for having to say what the economic outlook looks like,” said Douglas Holtz-Eakin, a former director of the Congressional Budget Office who served as an economic adviser to the late senator John McCain (R-Ariz.).

2.4 Million Initial Jobless Claims

That is 4 times worse than the record before this all started byt it’s seen as a sign of hope, which means that were screwed.

Something that I didn’t realize though, was that in addition to the 37.1 million initial claims since this all started, there is an additional 1 million claims that were through a federal program than had not been counted:

The numbers: More than 2.4 million unemployed Americans applied for unemployment benefits last week using the traditional method of reporting initial claims, but the real number was almost 1 million higher if applicants made eligible through a new federal relief program are included.

First-time filings for unemployment insurance totaled 2.44 million last week on the traditional seasonally adjusted basis. While still way above pre-coronavirus levels, new claims have declined for seven straight weeks following the apparent peak of 6.9 million seen in late March.

………

What happened:Since the coronavirus pandemic and lockdowns started in mid-March, some 35.5 million people have applied for jobless benefits through their states, based on actual or unadjusted totals.

Roughly 8.1 million new claims have been filed via a new federal program that has made self-employed workers and independent contractors such as writers or Uber drivers eligible for the first time ever.

Total new claims since mid-March: almost 44 million.

We are f%\$#ed.

What the People of Amsterdam Have Discovered

Amsterdam has been catering to tourists, for the weed, for the sex shops, the canals, and for the wonderful architecture, for years, and now its citizens have discovered that they like their city a lot better without the hoards of overbearing tourists:

Amsterdam’s historic Red Light District is rife with English-language city signs admonishing tourists: “Don’t pee in the street”; “No alcohol in public spaces”; “Put your trash in the bin”; “Fine: 140 euros.”

But the cartoonish black-and-red warnings on the 17th-century canals look strangely out of place these days. There are no visitors to heed them.

Beginning in mid-March, when the Netherlands went into semi-lockdown to combat the covid-19 pandemic, tourism vanished from Amsterdam almost overnight. A social and economic crisis has hit the country and its capital hard. But for residents of Amsterdam’s historic city center, there is a clear silver lining: temporary relief from the burden of overtourism.

………

Nowhere is the difference more clear than in the now-deserted alleys of the Wallen, as the red-light district is called. It is a major tourist draw, famous for the sight of sex workers soliciting from behind their windows and the many coffee shops where visitors can light up a joint. Here, noise is permanent, and nuisance a given. Tourists often leave trash and urinate in public.

………

“It’s just lovely. I’ve lived here five years, and I’m now getting to know neighbors I didn’t know I had. They used to blend into the crowd,” she says. “Now, when the sun is out, people take a chair and sit out front. It’s so gezellig,” she continues, using the common Dutch adverb that translates to “having a good time together.”

………

“It’s like the city is ours again,” she says, echoing a common sentiment among Amsterdammers who feel like their interests had become subordinate to those of visitors.

………

Seeing the pristine metropolis, many citizens feel like they are wandering through the Amsterdam of the past. Tim Verlaan, an assistant professor of urban history at the University of Amsterdam, draws a parallel to what it looked like in the 1970s and ‘80s.

“The lockdown, of course, is unprecedented. But many Amsterdammers are reminded of a time when the city first and foremost was a place to live, and not to consume or play tourist,” he says.

………

Through a combination of economic prosperity, a lowered crime rate and shrewd marketing, tourism to Amsterdam exploded. Global trends contributed further. Airfare became ever cheaper as the traveling middle classes of Europe and the United States were joined by those in Asia.

From the 21st century on, the balance in the inner city was definitively skewed toward visitors. Hotel rooms multiplied, streets felt permanently overcrowded. The canal cityscape became the domain of tours, ticket offices and souvenir shops. And perhaps the biggest offense to locals? The ever-multiplying sellers of ice cream and waffles sauced with Nutella chocolate, now the dreaded symbol of a monocultural tourism industry.

Last year, 9 million tourists, mostly foreigners, visited Amsterdam, a city of 820,000 people.

………

With tourism down and out, many are hoping things will be different after the current crisis.

“This is such an opportunity to reflect on where we go from here,” says Els Iping, spokeswoman for VVAB, an organization that protects cultural heritage in the inner city and has been a vocal advocate of restoring the balance in favor of residents. “We are proud of our city, and we like to see others enjoy it. But the superficial type of tourism that has people pay pocket change to fly out here has to stop.”

………

“You’ll likely see changes already in the making accelerated by this crisis,” Verlaan says.

To be on the safe side, Iping’s organization is already petitioning the city to stick to its guns. “Some in the tourism industry, of course, will now want to reverse these policies, citing the need for economic recovery,” she says.

“But almost everyone else agrees that Amsterdam should seize this moment to never return to the old situation again.”

I’ve wonder if the people who live in colonial Williamsburg feel the same way.

If you wonder why people live in tourist traps seem to hate tourists, this is it.

Another 3 Million New Jobless Claims

So the total since mid March, about 8 weeks, is 36½ million new jobless claims.

Assuming that the normal level of claims is 225,000 (PDF link, see page 6), this means that the excess initial unemployment claims is

$36,500,000–225,000×8=34,700,000$

excess unemployment claims.

The labor force was roughly 165 million with 3% unemployment, which gives about 170 million working or looking for work.

Just subtracting the 34.7 million excess claims, and a lot of people have not been processed, gives 23.4% unemployment (U3).

The above is just spit-balling by me, but it is not unreasonable to expect the unemployment rate to top 20% right now.