Tag: Statistics

It’s Jobless Thursday

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Better, but still not good initial unemployment claim numbers, 793,000 claims:

The labor market is offering signs the economy is starting to mend from a steep winter slowdown.

Worker filings for unemployment benefits—while still high—decreased to 793,000 last week, well below an early January peak that exceeded 900,000. Employers resumed hiring in January after payrolls fell at the end of 2020, and job openings picked up, driven by growth in industries that have weathered the pandemic relatively well.

………

One catalyst for the recent labor market improvement is the latest round of government aid, including small-business loans intended to help employers keep and rehire workers, said Ms. Markowska. Another is the relaxation of pandemic-related business restrictions in California and the Northeast.

………

Unemployment filings remain above the pre-pandemic peak of 695,000, pointing to the long road ahead for the recovery. About 4.5 million Americans were collecting unemployment benefits through regular state programs in the week ended Jan. 30. So-called continuing claims are well below pandemic highs but still more than double the levels seen a year ago.

………

Many workers are experiencing long spells of joblessness. About 4.8 million Americans who exhausted their regular state benefits were drawing on extended benefits through one of the federal pandemic programs in the week ended Jan. 23, a jump from 3.6 million a week earlier. 

At the very least, Biden and the Democrats, unlike Obama in 2009, recognize the risk is in doing too little, and not too much to ameliorate the situation.

U.S. Employers Added 49,000 Jobs in January – WSJ

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“Bad” reason why unemployment rate fell

— Liz Ann Sonders (@LizAnnSonders) February 5, 2021

The Denominator Fell


The scariest jobs chart ever

The January jobs report came out, and the word is anemic.

The unemployment rate fell, but only because fewer people were actively looking for work, and the non-farm workforce only grew by 49,000.  (About 150,000 a month is necessary to maintain employment levels)

Not good:

U.S. employers resumed hiring in January, but the weak pace of job gains suggested a long road remains for the recovery.

The U.S. economy added 49,000 jobs last month. The small gain came after payrolls fell steeply in December, the first decline since the coronavirus pandemic triggered business shutdowns last spring. The unemployment rate fell to 6.3% in January from 6.7% a month earlier, in part reflecting fewer people searching for jobs.



“The recovery is only stumbling along at this point,” said Sarah House, senior economist at Wells Fargo Securities. “Yes, we managed to eke out a gain, but we’re still 9.9 million jobs shy of where we were back in February” of last year before the pandemic hit hard, she said.

Jobs grew strongly in business and professional services, mainly in temporary help roles, the Labor Department said in its January report on U.S. employment. Many sectors, though, lost jobs last month. The leisure and hospitality sector shed 61,000 jobs, following a steep decline of 536,000 in December. Retailers and warehouses cut jobs in January after adding jobs strongly over the holidays.

The unemployment rate decline in January was driven by two factors. More people dropped out of the labor force—meaning they weren’t actively looking for a job and may have grown frustrated with their employment prospects. Also, the number of people reporting themselves as employed increased, consistent with a generally upward trend in hiring since last spring.

………

The broader economic recovery stalled significantly this winter. Unemployment claims, a proxy for layoffs, have remained above pre-pandemic levels. Consumers cut back on spending, as some were wary of leaving their homes as virus cases surged. Others wanted to shop and dine out, but had limited options.

………

Companies might struggle to find workers in part because the share of people seeking work remains depressed. The labor-force participation rate was 61.4% in January, down from 63.3% in February 2020, before the virus hit. Some people aren’t looking for work out of fear of contracting the virus. Others are burdened by increased child-care responsibilities or discouraged by limited job opportunities.

………

Many workers are facing long spells of unemployment. Just over four million people were out of work for 27 weeks or longer in January, the Labor Department said, compared with nearly 1.2 million a year ago. Others who lost their jobs earlier in the virus crisis have regained employment, but at much lower wages.

This is why the Biden administration is running around with their hair on fire to get the stimulus package out.

This is why I continue to invoke the undead felidae with a high coefficient of restitution.

More “Good” Unemployment Numbers

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Still higher than the preCovid-19 record, but initial claims fell to “only” 779,000:

The number of workers seeking unemployment benefits fell for the third straight week, a sign that layoffs have started to ease following an increase in early January.

Initial weekly unemployment claims declined to 779,000 last week, the Labor Department said Thursday, following a revised 812,000 claims the prior week.

The recent easing in weekly jobless claims—a proxy for layoffs—pointed to a stabilization in the number of workers applying for benefits, though the total remained at a higher weekly level than before a winter surge in coronavirus cases.

Claims also remained well above the pre-pandemic peak of 695,000 and are still higher than in any previous recession for records tracing back to 1967.

The latest jobless claims figures came a day before the government releases a more detailed look at U.S. employment in January. Economists forecast that employers added 50,000 jobs last month, following a 140,000 decline in December that marked the first decrease in payrolls in seven months. The unemployment rate is forecast to hold steady at 6.7%.

………

A separate report showed the pandemic’s effect on worker productivity. U.S. labor productivity fell at a 4.8% annual pace in the final months of 2020, the biggest quarterly decline since 1981, the Labor Department said. In the fourth quarter of the year, worker hours increased at a 10.7% pace and output rose at a 5.3% pace, pushing overall productivity lower.

This is why the Democrats need to move quickly to get the stimulus package passed.

The economy is, at best, just treading water.

This is Not a Growing Vibrant Economy

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Over the past 20 years, total employment in the US has grown by 11,767,000.

Over the same 20 years, employment among workers over 6o has increased by 11,879,000.

To put that in perspective, 101% of all the jobs gained in the past 20 years were among people who would have retired if the economy actually worked for people.

This might explain why the economists’ view of our economy, and that of ordinary people diverge so sharply.

To quote Douglas Adams, “This planet has – or rather had – a problem, which was this: most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movement of small green pieces of paper, which was odd because on the whole it wasn’t the small green pieces of paper that were unhappy.” 

What is going on, at least if you don’t buy into the rosy scenario promulgated by the St. Louis Fed, is that older people are working longer, because life has become more more precarious, with the end of defined benefit pensions, Wall Street looting of defined contributions (IRA, 401(K), etc.), and the general fall in wages over the past 45 years.

So people CAN’T retire, and younger workers are finding that the jobs that they would ordinarily get during their careers are not opening up.

It is a recipe for social unrest and extremism, but the green pieces of paper are quite happy:

Total U.S. employment grew by 11,767,000, or 8.5%, in the 20 years ending in December 2020. All that growth—11,879,000, or 101% of the total—was due to increased employment of people age 60 and older. Meanwhile, the net employment change over the past two decades of people ages 16-59 was -112,000 (-1% of the total change), despite this younger group being 3.8 times as large as the older group in December 2000 and still 2.4 times as large in December 2020. (See the figure below above.)

What’s Driving This Outcome

This age-skewed labor-market outcome was the result of two differences between the groups:

  • The older population (60 and older) grew much faster than the younger population (16-59).
  • The employment-to-population (E-P) ratio among those 60 and older increased significantly while the E-P ratio among the younger population declined, on balance.

With the exception of the large decline in the E-P ratio of the younger population, which is difficult to predict in the years ahead, the basic trend of rising employment among older workers is likely to continue for some time for the following reasons:

  • The older population is likely to continue growing faster than the younger group.
  • The E-P ratio of the 60 and older group is likely to increase further as the health and educational attainment of older people continues to improve and the demand for older workers persists.

Not Expecting This from the AEI

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The Numbers


Are Stark

Given that rich Wall Street pigs are a major funding source, I am surprised that the American Enterprise Institute has published a study that the S&P 500 index has out-performed hedge funds by about an factor of five. 

When one considers the fees, 2% of the fund +20% of the gains, it’s clear that, absent possible tax evasion and money laundering, hedge funds are a sucker bet:

In 2007, Warren Buffett entered into a famous bet that an unmanaged, low-cost S&P 500 stock index fund would out-perform an actively-managed group of high-cost hedge funds over the ten-year period from 2008 to 2017, when performance was measured net of fees, costs, and expenses. See previous CD posts about Buffett’s bet here and here. In Warren Buffett’s 2017 annual letter to shareholders (released on February 24, 2018), he summarized the result of his bet in the section “’The Bet’ is Over and Has Delivered an Unforeseen Investment Lesson” as follows:

Last year, at the 90% mark, I gave you a detailed report on a ten-year bet I made on December 19, 2007. Now I have the final tally – and, in several respects, it’s an eye-opener. I made the bet to publicize my conviction that my pick – a virtually cost-free investment in an unmanaged S&P 500 index fund – would, over time, deliver better results than those achieved by most investment professionals, however well-regarded and incentivized those “helpers” may be.

………

Performance comes, performance goes. Fees never falter.

………

A final lesson from our bet: Stick with big, “easy” decisions and eschew activity. During the ten-year bet, the 200-plus hedge-fund managers who were involved almost certainly made tens of thousands of buy and sell decisions. Most of those managers undoubtedly thought hard about their decisions, each of which they believed would prove advantageous. In the process of investing, they studied 10-Ks, interviewed managements, read trade journals and conferred with Wall Street analysts.

………

Repeat: Most investors will get better financial results over time with with low-cost, unmanaged index funds than from high-cost actively managed stock funds and hedge funds run by highly-paid investment professionals, however well-regarded and incentivized those “helpers” may be.

MP: To get started following Warren Buffett’s investment advice, if you haven’t already, you can open an account in the Vanguard 500 Index Fund Admiral Shares with a minimum investment of $3,000 and the expense ratio is almost zero — only 0.04% (1/25th of one percent) or only $4 per year for every $10,000 invested!

I’ve been saying this for years, but I did not expect this from the corporate drones at AEI.

And In Gender Equity News

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A study has shown that weakening unions increases gender inequality:

Barbara Biasi, assistant professor of economics at the Yale School of Management, recently published a study that concluded that eliminating unions increases the gender gap in wages.

She looked at data from Wisconsin, before and after Scott Walker eliminated collective bargaining rights in 2011, in his Koch-funded effort to destroy unions. 

………

Barbara Biasi, an assistant professor of economics at Yale SOM, had an opportunity to examine this question when Wisconsin passed Act 10, legislation that essentially weakened the power of teachers’ unions. Afterward, schools had much more latitude in deciding how much to pay teachers.

Five years after union agreements expired, male teachers earned about 1% more per year than female colleagues with similar experience and skills, reported Biasi and her co-author, Heather Sarsons at the University of Chicago Booth School of Business. The gender gap was even higher among younger teachers.

The anti-union wing of the Democratic Party (the identity politic folks) has always dismissed unions as bastions of racism and sexism, and the history clearly shows that, but dismissing unions hurts the people that they claim to want to help.

Pass the damn Pro Act, and strengthen the rights of workers to organize.

Initial Unemployment Claims and 2020 GDP Today

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Unemployment claims fell by 61,000 to a still horrifyingly high 847,000 and US GDP fell by 3.5% in 2020, the most since the 1946 demobilization.

This is with about $4 trillion in emergency stimulus legislation.

And now we are rushing way too fast to rolling back pandemic measures, which is going to lead another round of shutdowns as ICUs fill up.

We are fucked.

It’s Jobless Thursday

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US initial unemployment claims fell by 26,000 to 900,000 last week, and the4-week moving average rose to 848,000 from 824500.

These are not good numbers by any measure:

About 900,000 workers filed for unemployment benefits last week as the labor market struggles to recover this winter.

The number of jobless claims last week was down slightly from the week ended Jan. 9, when applications jumped by more than 100,000 to 926,000. The Labor Department said the increase for the Jan. 9 week—initially estimated as the largest weekly increase since March—was smaller than previously thought.

Jobless claims, a proxy for layoffs, remain above the pre-pandemic peak of 695,000 and are higher than in any previous recession for records tracing back to 1967.

“Covid hasn’t let up, and it’s still creating massive amounts of economic havoc,” AnnElizabeth Konkel, economist at jobs site Indeed, said.

As Covid-19 infections increased into the winter, states and localities imposed new capacity restrictions on businesses such as restaurants. Further, some consumers remain hesitant to eat indoors, travel or go to a movie theater, reducing demand at places that remain open.

Delayed filings by workers over the Christmas and New Year holidays, as well as $300 a week in extra jobless benefits included in a coronavirus-relief package signed into law last month, also could have factored into the large claims increase for the week ended Jan. 9. Still, the four-week moving average for claims, which smooths out weekly volatility, rose in the week ended Jan. 9.

Things are not going to get better until a larger stimulus is passed, and the pandemic recedes.

The Velocity of a Dead Cat at the Apex

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Initial jobless came out today, and it was pretty fucking awful, with jobless claims rising by 181,000 to 965,000 initial claims.

The stimulus has run its course, and the dead cat bounce has begun its downward path:

The number of workers filing for jobless benefits posted its biggest weekly gain since the pandemic hit last March and the head of the Federal Reserve warned the job market had a long way to go before it is strong again.

Applications for unemployment claims, a proxy for layoffs, rose by 181,000 to 965,000 last week, the Labor Department said Thursday, reflecting rising layoffs amid a winter surge in coronavirus cases.

The total for the week ended Jan. 9 also was the highest in nearly five months and put claims well above the roughly 800,000 a week they had averaged in recent months.

………

The U.S. labor-market recovery stalled last month with the December jobs report showing the U.S. lost 140,000 payroll positions. The economic recovery’s slowdown has included weakness in household spending, though economists expect the economy to rebound later this year as a Covid-19 vaccine is distributed through the population.

But the increase in unemployment claims is another sign that the economic recovery is, at least for now, sputtering, as Covid-19 infections hit record levels nationwide.

On a political note, this is a pretty good indication as to what a bad idea it is to play nice with Republicans over a stimulus package.

They are philosophically opposed to fixing this, and they are politically inclined to focus exclusively on taking down a Democratic President.

When you are being chased by wolves, don’t stop to bake them a cake.

Not Good

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What a Dead Cat Bounce Looks Like

Though initial unemployment claims fell slightly last week, by 3000, to 787000, the monthly jobs report shows non-farm employment falling for the first time since April.

The earlier stimulus efforts that propelled the economy have ended, and gravity has reasserted itself:

The U.S. economy shed 140,000 jobs in December — the first month of decline since the earliest months of the pandemic, as the recovery makes a U-turn after months of surging infections and delayed congressional action.

The unemployment rate stayed level at 6.7 percent.

The report, the last of President Trump’s time in office, showed the havoc that the pandemic continues to wreak on the economy as the country struggles to control the level of infections.

Employment in leisure and hospitality industries declined by 498,000, the majority of that at restaurants, bars and other food service establishments, which have struggled amid limitations from cold weather and a new round of restrictions across the country.

Employment in another tourism-related category — amusements, gambling and recreation — fell by 92,000. Government employment declined by 42,000. These declines offset modest gains in other sectors, such as professional and business services, retail and construction.

………

“It’s a damaged labor market,” said Augustine Faucher, chief economist at the PNC Financial Services Group. “But it is a labor market that is poised for recovery, given the fact that we are seeing the vaccine. With support from the federal government and support from the Federal Reserve, it could see a strong rebound over the next few years.”

Too many blither idiots (I’m talking to you, Larry Summers) are more concerned about hippie punching than they are about fixing things.

It’s Jobless Thursday on Wednesday

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Because of the upcoming holiday, unemployment claims number were released a day early, and while down a bit, it initial claims remain above eight hundred thousand:

The number of workers seeking unemployment benefits fell last week, amid signs the economy is continuing to recover, but at a slowing pace.

New jobless claims, a proxy for layoffs, came in at 803,000 for the week ended Dec. 19, down from an upwardly revised 892,000 the prior week, the Labor Department reported Wednesday.

The latest figures marked a retreat from a three-month high. Still, claims are hovering at their highest levels since recent peaks in September, as states and local municipalities impose fresh restrictions on social and business activity to combat a surge in coronavirus cases.

Additionally, household spending and income dropped in November:

Household spending dropped for the first time in seven months and layoffs remained elevated as a surge in virus cases weighed on economic recovery.

After going on a shopping spree this summer, consumers closed their wallets last month, cutting spending by 0.4%, the Commerce Department said Wednesday. They cut spending on services such as restaurant meals, as well as purchases of goods, including big-ticket items like cars and appliances.

Household incomes also took a hit as the effects of federal aid programs put in place earlier this year fade. Household income—measuring what Americans received in wages, investment returns and government aid—fell 1.1%, the third drop in four months.

We have been coasting on expired stimulus, and the economy is running out of momentum.

And the Dead Cat Continues Its Descent

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The Thursday initial unemployment claims are even worse than last week, with unemployment claims rising to 885,000 from 853,000. (actually that number was revised up by 9,000 to 862,000)

The increase in unemployment is not a blip any more.

The trend is definitely going in the wrong way:

The number of workers seeking unemployment benefits increased to a three-month high, another sign the economy is entering a winter slowdown as coronavirus cases rise and trigger new business restrictions.

Unemployment claims rose for the second straight week to 885,000 in the week ended Dec. 12, the Labor Department said Thursday. Last week marked the highest level for claims since September, when 893,000 workers applied for jobless benefits.

More broadly, claims are down sharply from a peak of nearly 7 million in March, but the four-week moving average, which smooths out weekly volatility, is increasing after trending downward since the spring. The weekly figures can be volatile around the holidays due to seasonal-adjustment issues.

………

Economic data broadly point to a slowdown. Retail sales dropped 1.1% in November from a month earlier, according to a Commerce Department report Wednesday. Overall consumer spending, which includes retail and services consumption, has continued to increase, but more slowly than over the summer.

………

Job growth cooled in November as many workers gave up looking for jobs. Robust job gains in the late spring and early summer largely reflected businesses adding back staff after lockdowns were lifted. But the recovery is far from complete, and many businesses continue to operate below capacity. Some state and local governments implemented new restrictions as coronavirus cases surged this fall.

While I expect any recovery to be faster than the debt-overhang of the great recession, it is not going to be fast, and it’s coming from a much lower place.

This will not end well.

The Velocity of a Dead Cat at the Apex is Zero

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It’s jobless Thursday, and initial jobless claims rose by 137,000 to 853,000 last week, an almost 20% jump in claims.

I have long maintained that the current “recovery” is a dead cat bounce*, and while one week does not make a trend, when combined with the recent Covid explosion, strongly suggest that we are in for a bumpy ride:

The economic recovery has downshifted, with job growth slowing and layoffs persisting at a high level amid rising coronavirus cases and related restrictions.

The number of workers seeking unemployment benefits, a proxy for layoffs, climbed sharply by 137,000 to 853,000 last week, the Labor Department reported.

The level of applications was the highest since September, but still well down from a peak of nearly seven million in late March. The number of applications for a separate federal pandemic program also rose sharply last week.

The claims figures add to signs the recovery continues, but at a cooler pace. Job growth eased in November and the number of job openings edged down in early December. The labor market’s partial rebound has been a key component in the overall economic recovery from a pandemic-related downturn in the spring.

………

Economists surveyed by The Wall Street Journal this month cut their projections for economic growth and job creation in the first quarter of 2021, but they expect the expansion to accelerate later in the year after coronavirus vaccines are more widely available.

 This will not end well.†

*I’ve been talking how the current “recovery” is a Dead Cat Bounce, which posits that. “even a dead cat will bounce if it falls from a great height”, for a while now.
†Thanks to my brother, Bear Who Swims, for a new catch phrase.

Not Good

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US Job growth was about ½ what was forecast last month, 245,000 versus forecasts of around 440,000.

The unemployment rate ticked down, but a lot of that is people who have stopped looking:

U.S. job growth slowed sharply in November, suggesting the labor-market recovery is losing steam amid a surge in coronavirus cases and new business restrictions.

Employers added 245,000 jobs last month, down from 610,000 jobs in October, the Labor Department reported Friday. The unemployment rate edged down slightly to 6.7% in November from 6.9% a month earlier, but that was partly because fewer Americans were seeking work.

………

Employers boosted jobs in transportation and warehousing last month, likely reflecting holiday hiring for e-commerce roles. Government payrolls declined by nearly 100,000, largely reflecting the roll-off of temporary workers hired for the 2020 census. Employment also fell in the retail category that includes bricks-and-mortar stores.

………

Economists say there are persistent risks of labor-market scarring. Many individuals, facing increased child-care responsibilities or limited job opportunities, have stopped looking for work altogether during the pandemic. The labor-force participation rate, or the share of Americans working or looking for work, was 61.5% in November. That is up from April’s trough, but remains near the lowest level since the 1970s.

The number of individuals out of the labor force who want a job increased in November to 7.1 million, Friday’s Labor Department report said.

The best metric we have for all of this is workforce participation, and it remains down.

In fact, it reached its peak 20 years ago, though the aging of the workforce has something to do with this.

From the perspective of the average job seeker, we have been in a recession for 20 years, which might explain and Trump Evil Minions™.

It’s Jobless Thursday

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Initial unemployment claims fell by 75,000 this week:

New applications for unemployment benefits fell last week after a recent jump, an indication that layoffs are easing but remain high as the labor market continues to recover from the effects of the coronavirus pandemic and related restrictions.

Weekly initial claims for jobless benefits, a proxy for layoffs, fell by 75,000 to a seasonally adjusted 712,000 in the week ended Nov. 28, the Labor Department said Thursday. That follows two consecutive increases and comes amid evidence that the economy continues to recover from the spring’s shutdowns, but at a slower pace. Last week’s level was only 1,000 more than the lowest level recorded since March, and well down from this year’s peak of nearly 7 million—but was still higher than any level recorded before 2020.

Several economists said they see the latest decrease as a possible anomaly related to last week’s Thanksgiving holiday. The data tends to be volatile around holidays, which affect states’ ability to process claims.

I’m not sure how accurate the numbers are going to be the rest of the year, but they remain historically high.

Initial Claims Up Again

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And the 4-week moving average rose for the first time since April.

Not good:

Jobless claims rose for the second straight week, to 778,000, a sign the nationwide surge in virus cases was starting to weigh on the labor-market recovery.

Claims haven’t risen for two consecutive weeks since July. Worker filings for unemployment insurance are down sharply from a peak of nearly seven million in late March. But they remain higher than in any previous recession—the pre-pandemic peak was 695,000 in 1982—for records tracing back to 1967.

Unemployment filings can be more volatile around the holidays, due to workweek changes that can cause seasonal-adjustment anomalies. The four-week moving average, which smooths out weekly variation, increased by 5,000 to 748,500, the Labor Department said Wednesday.

………

A nationwide surge in Covid-19 cases threatens to weigh on the economic recovery, as many states and localities impose new restrictions on businesses, though less stringent than the ones introduced in the spring, economists say. Further, the spread of the virus, combined with the onset of winter, is likely to send more consumers indoors and hamper spending and employment in industries like restaurants.

And the $600 a week unemployment subsidy has ended, and extended claims and support for unemployed gig economy workers, will be terminated with the new year.

This won’t end well.

Ha Ha!

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It appears that Donald Trump’s efforts to f%$# with the US Census will come to naught, because there are data processing issues that will not allow them to get the final results in time:

In a blow to the Trump administration’s efforts to strip unauthorized immigrants from census totals used for reapportionment, Census Bureau officials have concluded that they cannot produce the state population totals required to reallocate seats in the House of Representatives until after President Trump leaves office in January.

The president said in July that he planned to remove unauthorized immigrants from the count for the first time in history, leaving an older and whiter population as the basis for divvying up House seats, a shift that would be likely to increase the number of House seats held by Republicans over the next decade.

But on Wednesday, according to three bureau officials, the Census Bureau told the Commerce Department that a growing number of snags in the massive data-processing operation that generates population totals had delayed the completion of population calculations at least until Jan. 26, and perhaps to mid-February. Those officials spoke on the condition of anonymity for fear of reprisals from the Trump administration.

………

Under law, the White House must send a state-by-state census tally to the House of Representatives next year that will be used to reallocate House seats among the states. On Mr. Trump’s order, the Census Bureau is attempting to compile a separate state-by-state tally of unauthorized immigrants so that their numbers can be subtracted from official census results before they are dispatched to the House.

Good.

I Said That This Would Happen, and I Am the Second Worst Prognosticator in History*

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Once again, initial unemployment claims are rising under the dual whammys of a Covid explosion and the expiration of stimulus measures:

The number of applications for unemployment benefits rose sharply last week, indicating continued challenges for the U.S. economic recovery as coronavirus infections increased around the country.

Initial claims for jobless benefits, a proxy for layoffs, rose to a seasonally adjusted 742,000 last week, up from the 711,000 filed a week earlier. That level is more than three times higher than the roughly 210,000 typically filed each week in the first two months of 2020, though it is down sharply from a peak of nearly seven million in late March.

At present levels, initial jobless claims are still higher than they were in any other recession on record.

This is going to get worse before it gets better.

*The worst prognosticator in history was my dad, Ron Saroff ז״ל, who in 1968 famously said, “Those bastards nominated Richard Nixon, there is no way that they can win!”

Another Better, but not Good, Unemployment Report

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709,000 initial jobless claims last week, so better, but still worse than any week not in 2020.

New applications for unemployment benefits fell sharply last week, suggesting layoffs are easing as the broader economy flashes signs of improvement.

Initial claims for jobless benefits, a proxy for layoffs, declined to 709,000 last week from 757,000 a week earlier, the Labor Department said Thursday. While weekly claims have fallen from a peak of near 7 million at the end of March, they remain well above levels of about 200,000 seen before the coronavirus hit this spring.

 

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.