Congress Approves Defense Relief Funding For Americans To Receive Stimulus Aircraft Carrier
[Senate Majority Leader Mitch] McConnell added that should Americans need to pay rent, they can always sell their aircraft carriers to the Saudi government.
Brilliant.
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.
This is not a surprise.
One wonders what happens when the supplemental unemployment payments end next week:
Filings for weekly unemployment benefits rose for the first time in nearly four months as some states rolled back reopenings because of the coronavirus pandemic, a sign the jobs recovery could be faltering.
Initial unemployment claims rose by a seasonally adjusted 109,000 to 1.4 million for the week ended July 18, the Labor Department said Thursday, halting what had been a steady descent from a peak of 6.9 million in late March, when the pandemic and business closures shut down parts of the U.S. economy.
The increase followed a period where claims had settled around 1.3 million a week, well above the pre-pandemic record of 695,000 in 1982.
This is going to get ugly.
People keep saying that this is good news, but this is horrible news:
About 1.3 million workers filed for unemployment insurance for the first time last week — the 17th straight week new claims exceeded 1 million as the coronavirus pandemic continues to drag down the economy.
Nearly 17.4 million workers were continually claiming unemployment insurance for the week ended July 4, the Labor Department said. Another 14.3 million people were claiming Pandemic Unemployment Assistance, the program newly created for self-employed or gig workers who are out of work at the moment, bringing the total number of people on all programs to 32 million unemployed.
“What we’re seeing is continued, historic elevated rates of job loss in the United States,” said Nick Bunker, an economist at Indeed Hiring Lab. “We’ve seen sustained elevated rates of job loss, and that’s continued as we hurdle toward the expiration of several programs that have propped up the economy.”
The weekly filings decreased only slightly from the previous week, when 1.31 million workers filed for unemployment for the first time. They have steadily decreased from their high of 6.9 million filings for the week ended March 28, but the rate has slowed significantly in the past month.
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In April, 5.5 percent of people who were unemployed reported permanent job losses. By June, that figure increased to 20 percent. In April, the top five jobs with the worst losses were those most directly affected by the virus and shutdowns: housekeepers and cleaners, waiters, retail workers, and cashiers, he found.
But by June, those jobs had shifted to other occupations, pointing to broader economic damage: carpenters, paralegals, managers, financial analysts and customer sales representatives.
It’s more than twice the record from before the Covid-19 shutdown started, 16 weeks of initial claims over a million.
Until we are well below a million initial claims, it’s folly to claim that their is a recovery going on:
Initial unemployment claims fell by a seasonally adjusted 99,000 to 1.3 million for the week ended July 4, the Labor Department reported Thursday. That extends a trend of gradual declines from a peak of 6.9 million in mid-March, when the coronavirus pandemic and mandated business closures shut down swaths of the U.S. economy. Still, last week’s level was well above the highest week on record before this year, which was 695,000 in 1982.
The number of Americans receiving unemployment benefits fell by nearly 700,000 to 18.1 million for the week ended June 27, the lowest reading since the week ended April 18. Those so-called continuing claims are reported with a week lag. The modest easing of the number of unemployment rolls suggests new layoffs are being offset by hiring and recalling of workers.
Employers added a combined 7.5 million jobs in May and June after shedding 21 million jobs in March and April, separate Labor Department data showed.
Claims fell in most states last week, including California and Florida, on a non-seasonally-adjusted basis, the Labor Department said. Claims did rise by 20,000 in Texas, 18,700 in New Jersey and by nearly 10,000 in Louisiana.
FWIW, the claims drop for Florida is highly suspect, as their unemployment system was intentionally broken by Governor Rick “Bat Boy” Scott.
Even now, the Florida unemployment trust fund is earning millions in interest in delayed claims. (Also: Never go against a Sicilian when death is on the line.)
Given the corona virus explosion and the re-shutdown in Florida, it is simply inconceivable that that their claims fell.
Case in point, Moscow Mitch wants to take away the rights of ordinary people to benefit big business in the next stimulus package:
Senate Majority Leader Mitch McConnell (R-Ky.) outlined new details Monday of what he wants to see in the next and potentially final coronavirus relief package, including a five-year liability shield for businesses and a possible new round of stimulus checks aimed at workers making $40,000 a year and less.
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“I can’t comfortably predict we’re going to come together and pass it unanimously like we did a few months ago — the atmosphere is becoming a bit more political than it was in March,” McConnell said. “But I think we will do something again. I think the country needs one last boost.”
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McConnell has consistently said the next bill will include liability protections for businesses, health-care providers, universities and schools. He offered a time period for these protections on Monday, saying he envisioned a “narrowly crafted liability protection” for activities related to the novel coronavirus that would kick in December 2019 and last through 2024.
“Unless you’re grossly negligent or intentionally engaged in harmful behavior, you shouldn’t have to be penalized by getting sued on top of everything else, so that’ll be in there, I guarantee it,” McConnell said.
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The new markers McConnell laid down will make the next round of negotiations even tougher than the last ones, especially as the election nears and partisan tensions rise. In addition to his comments on liability protections, McConnell has privately stressed to top administration officials that the price tag on the next bill should not exceed $1 trillion.
So basically, McConnell’s pet lobbyists want to take away the right to sue, and McConnell is doing back-flips for them.
This man is a cancer on the Body politic.
It now appears that office rents in Manhattan are set to fall by more than a quarter.
Considering the leverage of most developers, and the relatively short term of real estate loans, they typically have to be refinanced every 5 years, we are looking at a huge number of bad loans popping up in the not too distant future:
Manhattan’s office rents are likely to plummet to the lowest level since 2012 if the U.S. economy doesn’t recover quickly from the pandemic.
Asking rents could decline 26% to about $62.47 a square foot (roughly $672 per square meter) in a prolonged recession, according to a report from Savills. Rents haven’t fallen to that level since 2012, the real estate services firm said.
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Savills’ research used indicators that it says are correlated to rental rates, including gross domestic product, unemployment and office vacancies in Manhattan.
Also, there is going to be a f%$# load of work from home which is likely to permanently depress office demand, because literally hundreds of thousands employers have discovered that you don’t have to have someone in the office 5 days a week. and that it saves them a fair chunk of change.
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%.
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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.
Initial unemployment claims remained at 1.5 million, worse than had been predicted.
This is not a “V-Shaped” recovery:
The number of workers seeking jobless benefits has held steady at about 1.5 million each week so far in June, signaling a slow recovery for the U.S. economy as states face new infections that could impede hiring and consumer spending.
Applications for unemployment benefits were slightly below 1.5 million last week, at 1.48 million, the Labor Department reported Thursday. While weekly totals have gradually eased from a late March peak of nearly 7 million, they also remain well above the prepandemic record of 695,000 in 1982.
Meanwhile, the number of people receiving benefits, an indicator for overall layoffs, totaled 19.5 million in the week ended June 13, down slightly from previous weeks.
Economists say the sluggish improvements in claims tallies dim prospects for a quick recovery. Further, a recent increase in coronavirus cases could affect efforts to reopen the economy—and get people back to work and spending money.
For the life of me, I do not know why.
We have seen it aiding corrupt politicians and businessmen steal from the taxpayers, and now they are managing bailouts to hospitals while instructing their hospital clients about how to game the system.
This is classic McKinsey. Their job is not about ethics, or even good management, it is about placing an ethical gloss on self-dealing, corruption, and looting:
The global consulting firm McKinsey, which has been tapped by the Department of Health and Human Services to help manage and audit billions of dollars in coronavirus relief for hospitals, has worked for at least 10 hospitals and chains that have received federal recovery funds, according to tax records and other public disclosures.
McKinsey was hired to help manage the program and establish audit procedures for the funds, according to the contract award, which was granted in late April and is worth $4.9 million.
The majority of the $175 billion in funds had yet to be paid out to hospitals when McKinsey was hired, though McKinsey denied playing any role in deciding which hospitals received funds. Among those that have already received payments are at least 10 hospitals and chains that have in recent years retained McKinsey & Co.’s extensive health care business, which employs more than 1,700 consultants. The hospitals have paid as much as $20 million for McKinsey’s services in a single year as they seek to streamline costs and boost revenue, according to public disclosures.
By, “Streamline costs and boost revenue,” they mean firing lots of people, price gouging, and reducing patient safety.
That’s in addition to using their inside position in monitoring the fund to help their clients to get a jump in the line.
Maybe when we talk about jailing bankers, we should add their consultants to the list.
Businesses are reopening after coronavirus shutdowns, governments are easing restrictions, and workers are gradually returning to their jobs. But the layoffs keep coming.
Another 1.5 million people applied for state unemployment benefits last week, the Labor Department said Thursday, while 760,000 more filed new claims for Pandemic Unemployment Assistance, a federal emergency program that extends benefits to self-employed workers, independent contractors and others who don’t qualify for standard benefits.
It was the 13th straight week that filings topped one million. Until the present crisis, the most new claims in a single week had been 695,000, in 1982.
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Economists said the current layoffs, though smaller than the wave in March and early April, were in some ways more worrying because they suggested that the crisis was reaching deeper into the economy even as lockdowns eased.
Gee, you think?
BTW, this was more claims than had been predicted.
Initial unemployment claims fell to a still horrifying high 1.5 million.
When the number drops below ½ million, we can start to talk about having a meaningful recovery.
As it stands, we still have not seen the full knock-on effects for April and May:
The number of people seeking unemployment benefits continued to fall while those receiving them appeared to plateau, signs the U.S. labor market continues to slowly mend from the coronavirus employment shock.
The ranks of Americans drawing on unemployment benefits declined slightly in the week ended May 30 to 20.9 million, the Labor Department said Thursday. So-called continuing claims remain historically high—the prepandemic record was 6.6 million in 2009—and appear to have stabilized in recent weeks after peaking in early May.
Though states continue to work through a backlog of claims, new applications for unemployment benefits have trended down since the coronavirus pandemic and related lockdowns triggered a surge in claims at the end of March. About 1.5 million applications were filed last week, compared with a peak of nearly 7 million in the week ended March 28.
Fasten your seat belts, it’s going to be a bumpy night.
Amid the depths of a global pandemic and financial downturn, the demand for real estate is unexpectedly rocketing in wealthy regions outside San Francisco, reports Bloomberg. Agents say that demand is soaring in affluent areas around the Bay Area such as Napa, Marin and further afield in Carmel, as people who have the means look to get away from the city. Meanwhile, the market in San Francisco and Alameda County is still well below where it was last year.
Elsewhere, Lake Tahoe has also seen a surge in real estate interest. The prospect of living out of the city on an alpine lake while maintaining a career is appealing for a new generation of young buyers, as many tech companies have signaled that remote work may be the new norm for a long time.
“I’ve never seen the demand higher for Marin County real estate than when COVID-19 hit,” Sotheby’s Josh Burns told Bloomberg this week, as real estate agents see a surprising uptick in wealthy buyers leaving San Francisco.
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Meanwhile, the rental market in San Francisco has dropped significantly, with rates for one-bedroom apartments in the city dropping by 9.2% since June 2019, and hitting a three-year low.
However, buying a new home in an isolated haven in a nearby bucolic county is not an option for lower-income San Francisco residents, and some believe the trend is only exacerbating the wealth divide.
“This is an example of another way the most advantaged, the most affluent have isolated themselves from this latest crisis,” Patrick Sharkey, a sociology professor at Princeton University, told Bloomberg. “It’s a very small segment of the population that has another home that they can go take off to.”
The wealthy have made San Francisco unlivable, and not that it is, they are moving on leaving devastation in their wake.
The wealthy are to community as my cats are to their litter box.
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.
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.
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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.
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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.
The unemployment rate for May unexpectedly fell to 13.3% in May.
This surprised pretty much everyone, with the consensus being an increase to nearly 20%:
The U.S. labor market snapped back to life in May, restoring a chunk of the jobs it lost in the first two months of the coronavirus pandemic while facing big obstacles in the months ahead.
After two months of carnage, employers added 2.5 million jobs last month, the most jobs added in a single month on records dating from 1948. The jobless rate fell to 13.3% from April’s 14.7%, a post-World War II high.
Employment remained down by nearly 20 million jobs, or 13%, since February, the month before the pandemic prompted states to shut down huge segments of their economies. By comparison, the U.S. shed about 9 million jobs between December 2007 and February 2010, a period that covered the recession caused by the financial crisis.
It should be noted that the unemployment rate would have risen to over 16% but for a statistical artifact:
When the U.S. government’s official jobs report for May came out on Friday, it included a note at the bottom saying there had been a major “error” indicating that the unemployment rate likely should be higher than the widely reported 13.3 percent rate.
The special note said that if this “misclassification error” had not occurred, the “overall unemployment rate would have been about 3 percentage points higher than reported,” meaning the unemployment rate would be about 16.3 percent for May.
The Bureau of Labor Statistics, the agency that puts out the monthly jobs reports, said it was working to fix the problem.
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Some took this as a sign that President Trump or one of his staffers may have tinkered with the data to make it look better, especially since most forecasters predicted the unemployment rate would be close to 20 percent in May, up from 14.7 percent in April. But economists and former BLS leaders from across the political spectrum strongly dismissed that idea.
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Economists say the BLS was trying to be as transparent as possible about how hard it is to collect real-time data during a pandemic. The BLS admitted that some people who should have been classified as “temporarily unemployed” during the shutdown were instead misclassified as employed but “absent” from work for “other reasons.”
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The “other reason” category is normally used for people on vacation, serving jury duty or taking leave to care for a child or relative. These are typically situations where the worker decides to take leave. But in this unusual pandemic circumstance, the “other reason” category was applied to some people staying at home and waiting to be called back.
This problem started in March when there was a big jump in people claiming they were temporarily “absent” from work for “other reasons.” The BLS noticed this and flagged it right away. In March, the BLS said the unemployment rate likely should have been 5.4 percent, instead of the official 4.4 percent rate. In April, the BLS said the real unemployment rate was likely about 19.7 percent, not 14.7 percent.
While this is better than the 6 million claims at the peak of the pandemic this week’s jobless report of 1.9 million claims is still almost three times worst than any weekly claims report before this year.
Tomorrow’s unemployment number is going to be grim:
Another 1.9 million Americans filed for unemployment benefits last week as the total number of claims passed 42 million since the coronavirus pandemic hit the US.
The pace of layoffs has slowed dramatically from its peak of 6.6m at the start of April as states start to relax quarantine orders and last week was the ninth consecutive week of declines. But the scale of layoffs remains staggeringly high. In the worst week of the last recession “just” 665,000 people filed for unemployment.
Jason Reed, professor of finance at the University of Notre Dame’s Mendoza College of Business, said the numbers may be coming down, but “this is unprecedented. The figures are so high that it’s hard to grasp the reality.”
On Friday the labor department will release May’s monthly jobs report. Economists are predicting unemployment will rise to close to 20% from 14.7% in April and some 8m more jobs will have been lost after a combined drop of 21.4m in March and April.
Tomorrow is going to be very grim.
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.
That’s just great:
The number of workers receiving unemployment benefits fell for the first time since February and new weekly claims continued to ease, offering evidence that layoffs related to the coronavirus pandemic are slowing.
Initial claims for unemployment benefits declined to a seasonally adjusted 2.1 million last week from 2.4 million the prior week, the Labor Department said. The level of claims is still 10 times prepandemic levels but has fallen for eight straight weeks.
Because employers are running out of people to lay off.
I will note that the recovery is not likely to be strong, because the people who are looking for work won’t have the resources to buy sh%$ once they find a new job.
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.
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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.