Tag: Recession

The Unemployment Rate Dropped in October

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Down to 6.9%.

As always, I am a pessimist, and think that this largely an illusion, and possibly some politically rat-f%$#ery.

Given the election, and the likelihood that Trump will spend the next 2½ months wrecking the place, I do not expect this to improve.

Also, a deeper dive into the numbers reveals some very real problems:

A better-than-expected October jobs report was immediately met with warnings that the surge in COVID-19 cases in the US could eventually force parts of the economy back into partial lockdowns.

That will apparently serve as the “fine print” on an otherwise solid report which showed the unemployment rate falling below 7%.

As ever, it’s important to look under the proverbial hood for evidence of the dreaded “scarring” effect that Jerome Powell (and other Fed officials) have consistently warned about since the onset of the pandemic. Jumping right in, long-term unemployment rose to 32.5% in October. That’s up sharply from 19.1% in September.

That figure has surged over the past two months. As Bloomberg’s Katia Dmitrieva puts it, “one-third of the unemployed haven’t had a job since the first round of coronavirus layoffs in April.”

Each month, I look at permanent job losses. Think of it as the economic equivalent of fatalities in the pandemic. It’s a macabre lagging indicator.

In October, that figure was little changed, stuck at nearly 3.7 million, up 2.4 million from February.

Needless to say, a situation that finds 2.4 million more job losses classified as “permanent” versus just eight months ago, argues for additional fiscal support.

Also notable is the rise in persons employed part time for economic reasons. October’s 383,000 increase was the first in five months.

………

The unfortunate reality is that payrolls remain 10 million lower than they were pre-pandemic. There’s (much) more work to be done. And surging COVID cases aren’t going to make that work any easier.

I am not the only won who thinks that we are in for the proverbial bumpy ride.

Unemployment Claims Steady This Week

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Unemployment claims were basically flat at 751,000, a drop of about seven thousand.

This is not indicative of a recovery:

The pace of the labor market recovery showed fresh signs of cooling last week, with new applications for unemployment benefits holding nearly steady as virus cases surged in several states.

Weekly initial claims for jobless benefits fell by 7,000 to a seasonally adjusted 751,000 in the week ended Oct. 31, the Labor Department said Thursday. That was the lowest level since mid-March, but was well above the 217,000 claims filed in late February, before economic shutdowns to control the spread of the new coronavirus began.

The previous week’s data were revised up by 7,000 to 758,000.

“The level of filings is trending down over time, but this downward trend has flattened noticeably,” JPMorgan Chase & Co. economist Daniel Silver wrote in a note to clients. “This is consistent with the idea that the labor market continues to recover, but that the pace of improvement has moderated.”

As I’ve noted before, the initial recovery was 1 part dead cat bounce, and 1 part the stimulus package,and both of those have expires.

GDP and Unemployment Numbers Today

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The initial jobless claims numbers are out, and they are not so bad: 

The number of Americans filing initial claims for unemployment insurance fell last week to the lowest level since the pandemic began, suggesting layoffs are easing despite a rise in coronavirus infections.

Initial jobless claims, a proxy for layoffs, fell by 40,000 to 751,000 in the week through Oct. 24, the Labor Department said Thursday. That was the lowest level of claims since mid-March, just before the pandemic shut down much business activity throughout the U.S.

But the other shoe dropped on the Covid front:

Daily virus infections reached new highs over the past week, and it is too early to tell how employers and consumers will respond.

Claims remain exceptionally high by historical standards. Last week’s new claims were more than three times the weekly average early this year, before the pandemic. Initial claims, which reflect the number of people laid off only recently and not those receiving assistance for more than a week, are just one measure of unemployment assistance. In total, more than 20 million Americans are still receiving unemployment benefits through regular state and emergency programs.

The GDP numbers for the 3rd quarter also came out today, and that initial report shows that the economy grew at 7.4% between July and September, which is impressive, but with the stimulus having ended, and Covid infections hitting new records, I am calling (as I always do) a dead cat bounce:

U.S. economic output increased at the fastest pace on record last quarter as businesses began to reopen and customers returned to stores. But the economy has climbed only partway out of its pandemic-induced hole, and progress is slowing.

Gross domestic product grew 7.4 percent in the third quarter, the Commerce Department said Thursday. The gain, the equivalent of 33.1 percent on an annualized basis, was by far the biggest since reliable statistics began after World War II.

The rebound was fueled in part by trillions of dollars in federal assistance to households and businesses. That aid has since dried up, even as the recovery remains far from complete: The economy in the third quarter was 3.5 percent smaller than at the end of 2019, before the pandemic. By comparison, G.D.P. shrank 4 percent over the entire year and a half of the Great Recession a decade ago.

………

Economists said the third-quarter figures revealed less about the strength of the recovery than about the severity of the collapse that preceded it. G.D.P. fell 1.3 percent in the first quarter and 9 percent in the second as the pandemic forced widespread business closures. A big rebound was inevitable once the economy began to reopen. The challenge is what comes next.

I do not think that the 4th quarter will come even close to the numbers, particularly with Covid exploding.

*It’s an old Wall Street saying, “Even a dead cat will bounce if it falls from a great height.”

Good News on Initial Claims

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They have fallen to within spitting distance of the pre-2020 record.

Obviously, this is good news only in a relative context.

 I still do not know what is keeping the economy afloat

New applications for unemployment benefits so far this month fell to the lowest levels since the coronavirus pandemic shut many businesses in March, a sign of improvement for the U.S. economy.

Weekly initial claims for jobless benefits, a proxy for layoffs, fell by 55,000 to a seasonally adjusted 787,000 in the week ended Oct. 17, the Labor Department said Thursday. Claims for the prior two weeks were revised lower, reflecting new data from California. The revised level of claims for the week ended Oct. 3—767,000—was the lowest since the March 14 week, when less than 300,000 new claims were filed.

Declining layoffs add to indicators the economy is continuing to heal from the pandemic downturn. The National Association of Realtors reported Thursday that existing-home sales rose 9.4% in September to the highest level since 2006, and consumer spending rose last month, despite historically high unemployment.

Still, with millions out of work and concerns about a resurgence of the virus in many parts of the country, many economists expect the pace of economic recovery to slow.

 Still waiting for the other shoe to drop,

Initial Jobless Claims Up

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Initial unemployment claims rose by 53,000 to 898,000 last week. 

Some recovery, huh?

The much-touted recovery is increasingly looking like a dead cat bounce:

The number of Americans filing new applications for unemployment benefits rose last week to the highest level since late August, with fresh layoffs adding to other signs the economic recovery is losing steam as the coronavirus pandemic continues.

Claims increased to 898,000 last week, holding well above the pre-pandemic high point of 695,000, the Labor Department reported Thursday. After declining from a peak of near 7 million in March, weekly claims have clocked in between 800,000 and 900,000 for more than a month as companies readjust their head counts.

The economy more broadly is flashing signs of slowdown. Monthly job gains have cooled recently, as has growth in consumer spending and factory output.

“The jobless claims continued to reflect very difficult labor market conditions,” said Kathy Bostjancic, an economist at Oxford Economics. “It’s representative of still uncertain and challenging economic conditions at large.”


The number of people collecting unemployment benefits through regular state programs, which cover most workers, fell to about 10 million in the week ended Oct. 3 from 11.2 million the previous week, according to the Labor Department. So-called continuing claims declined throughout the summer, indicating employers continued to hire workers.
However, some of the recent declines in continuing claims represent individuals who have exhausted the maximum duration of payments available through regular state programs, and are now collecting money through a federal program that provides an extra 13 weeks of benefits. About 2.8 million people were receiving aid through this extended-benefits program in the week ended Sept. 26—the largest number since the program began this spring, Labor Department data show.

………

This suggests many Americans are experiencing long spells of joblessness and relying on unemployment insurance to keep paying bills. The extended-benefits program is set to expire at the end of this year without additional federal stimulus. ………

………

Weekly figures can be volatile, but the four-week moving average for claims rose as well, to 866,250, a sign more workers are losing their jobs.

“We’ve seen a number of large firms report layoffs, some of it because the pace of recovery is slower than maybe they had hoped for,” Ms. Bostjancic said.

A Wall Street Journal survey found more than half of business and academic economists polled this month said they didn’t expect the labor market to regain all the jobs from the pandemic until 2023 or later. That is a slower timeline than economists predicted six months ago.

There will be no V-shaped recovery.

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

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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

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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

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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.

Federal Reserve Open Market Committee Issues Report

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 A brief summary of their statement is, “Sh%$ is f%$#ed up, and we have to do something.”

Federal Reserve officials expect to leave interest rates near zero for years — through at least 2023 — and will tolerate periods of higher inflation as they try to revive the labor market and economy, based on their September policy statement and economic projections released Wednesday.

The announcement codifies that the Fed chair, Jerome H. Powell, and his colleagues plan to be extraordinarily patient as they try to cushion the economy in the months and years ahead.

The policy-setting Federal Open Market Committee “expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time,” officials said in their statement.

………

The Fed updated its Summary of Economic Projections, a set of estimates for how the economy and interest rates will develop in coming years. Officials saw unemployment ending 2020 at a lower rate than it previously forecast: The median official expects the rate to average 7.6 percent over the final three months of the year, compared with 9.3 percent when the Fed released its last set of projections in June.

It’s not a bad policy, but it comes from a horrible reality.

Unemployment Numbers out Today

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This is not a recovery

Initial claims were unchanged at 884,000, which is still really awful:

The number of people seeking and collecting unemployment benefits has remained at historically high levels in recent weeks, a sign the labor-market recovery is losing steam six months after the pandemic struck the U.S.

 Unemployment claims were unchanged at 884,000 last week, the Labor Department said Thursday. Claims fell steadily for weeks after hitting a peak of about 7 million in March, but the pace of descent has slowed and claims remain above the prepandemic record of 695,000.

The number of workers collecting state unemployment benefits also has dropped from highs reached earlier in the pandemic, but is still elevated. So-called continuing claims increased to about 13.4 million at the end of August.

………

The increase in the number of job postings, a real-time measure of labor-market activity, has markedly slowed since late July, and last week stood about 20% below 2019 levels, according to data from job-search site Indeed.com.

And remember, the pump priming of the original aid bill has ended, and Mitch McConnell has no interests in passing another bill, he just want to score political points, and as the heating season begins, and internal becomes drier, Covid will be more contagious.

We are f%$#ed.

Analogy of the Day

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The US Economy is Having a Wile E Coyote Moment

—Financial Times

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.

Unemployment Rate Falls

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The Scariest Job Chart Ever

The official U-3 unemployment rate fell by 1.8% to 8.4% and the number of unemployed fell by 2.8 million to 13.6 million.

It’s undeniably good numbers, particularly since the employment/population ratio, which is hard to rat-f%$#, has risen as well.

Note that the numbers are from 2 weeks ago though, just 2 weeks after the $600 unemployment supplement ended.

From a political perspective, both sides are going to try to make political hay over this, and the media, being what it is, will absolutely represent it as a “Both Sides” thing.

New Initial Claims Today

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Unemployment claims fell to below 1 million again, but the actual adjusted number rose by 8000.

The fall is because the DOL changed its seasonal adjustment formula for this report.

Also note that Pandemic Unemployment Assistance(PUA) initial claims for self-employed and gig workers, rose by over 150,000 to 759K.

I know that people dismiss the possibility that eh “Professionals” at the Department of Labor are bending to the political winds blowing from 1600 Pennsylvania avenue, but every one of these adjustments seems to favor the Trump administration:

Note: The DOL has changed their seasonal adjustment method, so to compare to the previous week, we need to use the NSA data.  See Technical Note on Weekly Unemployment Claims

The Not Seasonally Adjusted (NSA) claims increased to 833,352 from 825,761 the previous week. These are directly comparable since the Seasonal Adjustment Factor was identical for both weeks.

The DOL reported:

In the week ending August 29, the advance figure for seasonally adjusted initial claims was 881,000, a decrease of 130,000 from the previous week’s revised level. The previous week’s level was revised up by 5,000 from 1,006,000 to 1,011,000. The 4-week moving average was 991,750, a decrease of 77,500 from the previous week’s revised average.
The previous week’s average was revised up by 1,250 from 1,068,000 to 1,069,250.


emphasis added

The previous week was revised up.

This does not include the 759,482 initial claims for Pandemic Unemployment Assistance (PUA) that was up from 607,808 the previous week.

I’m not saying that the DOL is juicing the numbers, the seasonal adjustment needed to be  ……… well ……… adjusted, but it does seem that the DOL is spinning the numbers.

Still Over 1 Million

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Initial unemployment claims fell by 98,000 to 1,006,000 last week.

I expect the employment to population levels not to reach where they were in February for at least a year.

Also, I expect the effects of the termination of the supplementary unemployment payments sooner rather than later, which will further slow down the economy:

Unemployment claims fell slightly last week but remained historically high, signaling layoffs continue as the coronavirus continues to hamper the economic recovery.

New applications for unemployment benefits ticked down to one million in the week ended Aug. 22, the Labor Department said Thursday. Initial unemployment claims remain well below the recent peak of about seven million in March but are far higher than pre-pandemic levels of about 200,000 claims a week.

The number of people collecting unemployment benefits through regular state programs, which cover most workers, edged down to about 14.5 million for the week ended Aug. 15. So-called continuing claims, which are released with a one-week lag, hit a high of nearly 25 million this spring but have declined in recent weeks, a sign companies are bringing back workers.

“We’re seeing gradual improvement, but we really need to underscore the word ‘gradual’ here. We’re only inching along in terms of the labor market’s recovery,” said Sarah House, senior economist at Wells Fargo Securities.

In a separate report released Thursday, the Commerce Department revised its estimate of second-quarter economic growth, saying gross domestic product fell at a 31.7% annual rate, slightly less than its earlier estimate of 32.9%, due to the effects of the coronavirus pandemic.

Those numbers are not just catastrophic, they are apocalyptic.

Over 1 Million!!!!!

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Initial jobless claims rose to 1,106,000 last week, up from 971,000 the week before.

This is the first increase in initial claims since the Covid shutdown began.

This is not going to be a short duration recession.  We have over 15 million continuing claims, up from about 2 million before the shutdown, and an increasing number of the layoffs have become permanent.

Then we have something like 30 million Americans facing foreclosure or eviction.

This will not be a “V” shaped recovery:

New applications for unemployment benefits rose last week after a series of declines, another sign the labor market’s recovery is cooling amid continuing disruptions because of the coronavirus pandemic.

Weekly initial claims for jobless benefits rose by 135,000 to a seasonally adjusted 1.1 million in the week ended Aug. 15, the Labor Department said Thursday.

The report followed others from the government and private firms showing that job gains slowed in July from June, job postings fell this week for the first time since April and several companies are planning more layoffs.

Still, the data show the job market is improving, though more slowly than in the spring.The number of people collecting unemployment benefits through regular state programs, which cover most workers, fell to about 14.8 million for the week ended Aug. 8. That marked the lowest number on benefit rolls since April. And nationally, new hiring is more than offsetting job cuts.

………

In addition to regular state claims, Thursday’s report showed the number of people applying for special federal pandemic assistance also rose in the week that ended Aug. 15. That program is open to self-employed and other workers who aren’t eligible for state programs. In early August, more than 11 million people were receiving benefits through that program.

These numbers are catastrophic, and unprecedented in post war labor statistics.

There are way too many people, and this coverage, are whistling past the grave yard.

Under 1 Million

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The Trend is Encouraging

Initial jobless claims fell below 1 million for the first time in five months.

The number is bad, it’s no longer twice than the pre-Covid record:

U.S. unemployment claims fell below one million last week for the first time since the coronavirus pandemic struck in March, as the deeply wounded labor market continues to regain some footing.

New applications for unemployment benefits dropped to a seasonally adjusted 963,000 in the week ended Aug. 8, the Labor Department said Thursday, marking the second weekly reduction in filings. The number of people collecting unemployment benefits through regular state programs, which cover the majority of workers, also decreased to about 15.5 million at the beginning of August.

 But both figures remain well above even the worst figures before the pandemic struck, with the number of people receiving benefits more than double the 6.6 million reached in 2009.

Unemployment remains elevated as other measures of the economy, including consumer spending, also lag behind levels from before the coronavirus hit. An increase in coronavirus infections across much of the country continues to threaten economic gains as states put in place new restrictions aimed at containing the pandemic.

………

The drop in claims could also reflect waning fiscal support by the government, Ms. Pollak said. The late-July expiration of an extra $600 a week in federal jobless benefits—added in March under a virus-relief package—puts much less money in unemployed individuals’ pockets, possibly discouraging them from seeking benefits.

Without the $600 weekly boost, payments dropped to the level set by states, which averaged about $330 a week for the 12 months through June, according to the Labor Department.

The downside to all of this is that more places, and businesses, are backing off from reopening because of new outbreaks, and the programs that cushioned the impact, notwithstanding Donald Trump’s bullsh%$ executive orders, have shut down.

The countervailing winds are strengthening.

Most of This Is Completely Unconstitutional

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In response to Republican attempts to run out the clock on pandemic relief, which Trump has characterized as Democratic stonewalling, Trump has issued a profoundly constitutionally dubious executive order which appeared geared toward his reelection, with a side order of killing Social Security.

Briefly, he has issued an order for $400/week supplemental unemployment payments, a suspension of Social Security tax payments, deferring student loan payments and cutting interest, and extending the eviction moratorium.

The first two items are very clearly unconstitutional, Congress has exclusive power over taxation under, and I’m not sure that he has authority over either the student loan or eviction actions.

The interesting thing is that anyone who is a landlord has standing to challenge the executive order, since they can show damages to themselves personally.

I expect this to hit court (more likely courts) by the close of business on Monday:

President Trump took executive action on Saturday to circumvent Congress and try to extend an array of federal pandemic relief, resorting to a legally dubious set of edicts whose impact was unclear, as negotiations over an economic recovery package appeared on the brink of collapse.

It was not clear what authority Mr. Trump had to act on his own on the measures or what immediate effect, if any, they would have, given that Congress controls federal spending. But his decision to sign the measures — billed as a federal eviction ban, a payroll tax suspension, and relief for student borrowers and $400 a week for the unemployed — reflected the failure of two weeks of talks between White House officials and top congressional Democrats to strike a deal on a broad relief plan as crucial benefits have expired with no resolution in sight.

………

“We’ve had it,” he added, repeatedly referring to his directives as “bills,” a term reserved for legislation passed by Congress. He accused the Democrats of holding up negotiations with demands for provisions that appeared to have little to do with the pandemic, though he made little mention of comparable items in the $1 trillion proposal Republicans unveiled last month.

Democrats have refused to agree to that plan, pressing instead for a far more expansive economic relief package, at least twice as large, that would provide billions more for states and cities and food aid, and revive the lapsed $600-per-week enhanced federal jobless aid payments. (Republicans are proposing to revive the payments, but at a rate of $400 a week.)

………

It was unclear whether the aid would even materialize if lawsuits are filed challenging their legality. Mr. Trump walked away from the lectern after just a few questions from reporters about his claim that he had the ability to circumvent Congress.

………

Shortly after the event on Saturday, the White House released texts of the measures — one executive order and three memorandums — which included several flourishes that read like political documents in accusing Democrats of playing games. One invoked the Stafford Act, a federal disaster relief statute, to divert money from a homeland security fund and allow states to use money already allocated by Congress to help people who have been laid off amid the coronavirus pandemic, effectively allowing them to apply for disaster relief to cover lost wages. The mechanism would pull from the same fund that covers natural disasters in the middle of what is expected to be a highly active hurricane season.

………

It was unclear how quickly states, whose unemployment systems had already been overburdened by the record numbers of new jobless claims, would be able to adjust to a new system, or whether they will have the resources to supplement an additional benefit.

………

He also retroactively signed a memorandum suspending the payroll tax from Aug. 1 through the end of 2020, though the order would just defer the payment of the taxes. (Mr. Trump vowed that if re-elected in November, he would extend the deferral and the payments.)

If Mr. Trump tried to make a payroll tax cut permanent, it would have a drastic effect on the funding of Social Security, which he has previously vowed not to cut.

Trump has actually promised to permanently eliminate the Social Security and Medicare taxes, so that “vow” is inoperative.

The memorandum that Mr. Trump called a moratorium on evictions did not revive the expired moratorium that was part of the $2.2 trillion stimulus law passed in March. Instead, it said that federal policy was to minimize evictions during the pandemic and that officials should identify statutory ways to help homeowners and renters.

So his actions on evictions translate to, “¯_(ツ)_/¯”.  Weak tea.

Needless to say this is a political ploy, and there likely to be weeks, if not months of legal challenges before they might take effect.

Still Over 10%

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Obviously, this is movement in the right direction, though there are still indications that the BLS survey has not handled the unique circumstances of the pandemic. (There are also some more tinfoil hat possibilities, but Very Serious People don’t discuss such things)

Hiring increased in July for the third straight month, though overall gains have yet to restore half of the U.S. jobs lost due to the coronavirus pandemic.

July’s addition of 1.8 million jobs and a lower unemployment rate of 10.2%, after a peak of nearly 15% in April, showed the U.S. economy continued to mend during the summer coronavirus surge. It also reflected how far the economy has to go to overcome the shock from the pandemic and related lockdowns.

The U.S. now has about 13 million fewer jobs than in February, the month before the coronavirus hit the U.S. economy, the Labor Department said on Friday. Unemployment remains historically high. Before the coronavirus drove the U.S. into a deep recession this year, the unemployment rate was hovering around a 50-year low of 3.5%.

“We’re in a pretty strong rebound,” said David Berson, Nationwide Mutual Insurance Co. chief economist. “But the downturn was so big—the hole that was dug was so deep—that it will still take probably at least a couple of years to dig ourselves out.”

It might take longer than that, since supplemental unemployment benefits have ended, and eviction moratoriums are coming to an end.

Still anyone who calls double-digit unemployment good news need their head examined.

Unhorrible News on Unemployment

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At least to the degree that 1.19 million initial unemployment claims can be called not horrible, because by the standards of before this March, such a number would be considered catestrophic.

I’m wondering what’s going to happen with the unemployment rate tomorrow:

Applications for U.S. unemployment benefits unexpectedly fell last week to the lowest since March, offering a ray of hope for an economy still battered by the pandemic.

 Initial jobless claims in regular state programs fell by 249,000 to 1.19 million in the week ended Aug. 1, Labor Department data showed Thursday. That was the largest improvement in almost two months. Continuing claims — the total number of Americans claiming ongoing unemployment benefits in those programs — decreased to 16.1 million in the week ended July 25, the lowest since April.

 Even with the drop, initial claims were more than five times pre-crisis levels. Analysts have cautioned that it could take some time to confirm a sustainable trend in improvement — especially if the expiration of the weekly $600 in federal benefits discouraged some from filing claims. With cumulative job losses numbering in the tens of millions, it will take not just steady improvement in the number of weekly claims, but also in hiring, for the labor market to rebound to any semblance of its pre-pandemic state.

………

The labor market had been showing signs of stalling in recent weeks as a resurgence in virus cases, beginning in mid-June, led a slew of states to halt or even reverse reopenings. That surge has begun to ebb, potentially supporting hiring, but the outlook could deteriorate once again as businesses exhaust funds from the Paycheck Protection Program.

Meanwhile, the extra $600 in weekly jobless benefits that have helped keep incomes and spending afloat in recent months has expired, threatening the fragile economic rebound.

If we don’t see the $600/week coming back soon, we’re going to see massive knock-off effects.

Stock Options Don’t Exercise Themselves

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Despite profits cratering like a Boeing 737 MAX with an Indonesian pilot, the captains of industry in the United States are continuing their stock buy-backs unabated.

This is not about preserving shareholder value, this is about keeping those executives stock options above water.  It is corrupt, and arguably fraud:

Corporate America is finding it hard to kick the share buyback habit, even after the US slipped into its worst recession in decades.

Total buybacks are expected to drop this year as the downturn caused by coronavirus saps corporate profits, prompting many US blue-chips to suspend or cut back share repurchases. Yet companies in the S&P 500 that have reported second-quarter earnings so far have reduced the number of their outstanding shares by an average of 0.3 per cent from the previous quarter, according to calculations from Credit Suisse.

Updates showed that some of the largest US multinationals continued to buy back their own stock or even accelerated stock repurchases.

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David Lebovitz, global market strategist for JPMorgan Asset Management, noted that the buybacks were “not happening everywhere”, but were “driven by specific sectors and stocks”. He added that financial and materials companies were potentially more willing to engage in buybacks through the downturn, because their stocks have not advanced as much as companies in other sectors since the lows in March.

Mr. Lebovitz is lying, and he knows it.

This is about executives boosting their own bottom line, not the company’s.