Tag: Recession

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.

In the Words of Marcel Marceau

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No!

Republicans had a proposition for Joe Biden, a Covid relief package that was clearly inadequate, and Biden gave them a (polite) brush-off.

While Biden might have an honest commitment to bipartisanship, unlike his former boss, he does not see it as an end in itself, nor does he see it as a demonstration of just how awesome he is:

Ten Senate Republicans attempted to sell President Joe Biden Monday night on a coronavirus relief compromise, even as Biden’s own party made plans to leave the GOP in the dust.

In the two-hour meeting, the GOP senators presented their $618 billion counterproposal to Biden and Vice President Kamala Harris, and the president described his own $1.9 trillion plan to the senators. They agreed to keep talking, although senators conceded their discussions were just beginning.

………

Biden has spoken frequently of his ability to work with Senate Republicans after his long Senate service, and simply meeting with the group demonstrates his ability to hear his opposition out. But the reality is this: Republicans oppose Biden’s spending plans and are proposing something far smaller.

Sen. Susan Collins (R-Maine), who helped organize the meeting, praised Biden for hosting GOP senators: “We’re very appreciative that as his first official meeting in the Oval Office that the president chose to spend so much time with us.” But she also acknowledged there wasn’t an explicit breakthrough between sides that are so far apart.

………

Shortly before the meeting, Democratic leaders announced they would begin a process that would allow passage of Biden’s coronavirus stimulus plan without GOP votes, a sign that Democrats have little confidence that a suitable deal can be struck with Republicans. Sen. Jon Tester (D-Mont.), a centrist, said succinctly of the GOP’s plan: “The package has to be bigger than that.”

“This needs to be big enough to get the job done. If we’re having to come back time and time again, I just don’t think that’s good for the economy or for certainty,” Tester said at the Capitol.

Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer announced they would continue setting up budget reconciliation this week, which would evade the Senate’s 60-vote requirement. They will pass a budget this week instructing committees to write a $1.9 trillion coronavirus relief bill, which includes items like raising the minimum wage to $15 an hour and giving $400 in additional weekly unemployment assistance through September.

“While there were areas of agreement, the President also reiterated his view that Congress must respond boldly and urgently, and noted many areas which the Republican senators’ proposal does not address. He reiterated that while he is hopeful that the Rescue Plan can pass with bipartisan support, a reconciliation package is a path to achieve that end,” White House Press Secretary Jen Psaki said after the meeting.

It’s refreshing that we have a President who does not believe his own PR spin.

We have not had that in at least 20 years.

Read His Lips

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$2000.00 stimulus checks are popular. Their popularity was such, even in Georgia, that it led to the Democrats taking control of the Senate.  (It was a big part of the campaigning for the runoff)

Now, the very serious people are trying to scale back and means test the stimulus to irrelevancy.

It is patently clear that this is bad policy and even worse politics.  It is George H.W. Bush’s no new taxes pledge all over again:

On January 4, Joe Biden made an unequivocal pledge, telling voters that by electing Democrats to Georgia’s senate seats, “you can make an immediate difference in your own lives, the lives of people all across this country because their election will put an end to the block in Washington on that $2,000 stimulus check, that money that will go out the door immediately to people who are in real trouble.”

Now they are counting the $600, so $1400 is the new 2000, saying that it will take months to pass the bill, making overtures to Republicans, etc.

A little more than a decade later, the public option fight should be a harrowing cautionary tale for Biden on both the policy and the politics. He had a front-row seat in watching a bad-faith Republican opposition kill a much-needed initiative, and then use Democrats’ failure to deliver to win at the polls. He of all people should know that this story never ends well.

………

The $2,000 checks initiative does not have to go down the same way the public option went down. The president and congressional Democrats do not have to do what weak-kneed, wimpy Democrats of the past have so often done. They do not have to negotiate against themselves, word-parse their way out of campaign pledges and delude themselves into thinking that Republicans are good-faith legislative partners.

They could instead try to use their election mandate — and the weakened state of the GOP — to demand full survival checks, rather than pretending that bad-faith Republican senators have any standing to make policy arguments.

The “Very Serious People” are going to “reasonable” themselves into losses in 2022 that make the 2010 blood letting look like a walk in the park.

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.

Muck Fitch

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In responce to increasing calls from both sides of the aisle to hold a vote on the House’s clean $2000.00 stimulus check bill, Mitch McConnell has introduced a dirty bill, including a provision for a complete repeal of Section 230 of the CDA, not because he gives a crap about Section 230, and also a bit about setting up a commission to study election fraud, but because he is trying to kill the movement toward making a larger payment.

This will give Democrats an excuse to cave, and I think that they will try to do so.

Hopefully, Sanders will stick to his guns, and keep the Senate in Session for the mandatory debate the Senate rules require without unanimous consent.

In the mean time, if you see McConnell, throw your shoe at him, and if you see Amy McGrath, thank her for 6 more years of Moscow Mitch:

Senate Majority Leader Mitch McConnell (R-KY) has thrown a wrench into Congressional approval of an increase in government stimulus relief checks from $600 to $2,000. The House voted overwhelmingly on Monday to increase the payments, as President Trump had advocated for. Instead of voting on the House bill, however, McConnell blocked it and instead introduced a new bill tying higher stimulus payments to Section 230’s full repeal, according to Verge, which obtained a copy of the bill’s text.

It’s a tangled web, but the move is tied to Trump’s veto of the National Defense Authorization Act, which authorizes $740 billion in defense spending for the upcoming government fiscal year. “No one has worked harder, or approved more money for the military, than I have,” Trump said in a statement about the veto, claiming falsely that the military “was totally depleted” when he took office in 2017. “Your failure to terminate the very dangerous national security risk of Section 230 will make our intelligence virtually impossible to conduct without everyone knowing what we are doing at every step.”

………

So what does this have to do with McConnell’s latest political maneuvering? Think of it as a move to appease Trump with regard to Section 230, while also effectively ensuring that the $2,000 increase in stimulus checks will never pass in the Senate. “During this process, the president highlighted three additional issues of national significance he would like to see Congress tackle together,” McConnell said in a floor statement Tuesday afternoon. “This week, the Senate will begin a process to bring these three priorities into focus.”

McConnell is a cancer on the American body politic, but the last election cycle, the Democratic Party establishment (There is no Democratic Party establishment) decided that it was more important to have an expensive candidate, who would generate lots of consultant commissions, than it would to have a good candidate.

I Thought That the Crazy Season Was Supposed to End with the Election

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My loyal reader(s) are no doubt aware that I was unimpressed with the stimulus package that the Congressional Democrats capitulated themselves into.

It appears that Donald Trump is equally unempressed, as he is strongly implying that he will veto the bill if the individual payments are not increased from $600 to $2,000:

President Trump’s last-minute move to reject a sweeping coronavirus relief package is escalating confusion and panic among Republicans while setting the stage for an uncomfortable confrontation Thursday that could lead GOP lawmakers to object to their own president’s demand for larger stimulus checks for Americans.

The chaos is unfolding against the backdrop of another threatened government shutdown, with funding set to lapse starting Tuesday unless a spending bill to keep federal operations running is signed into law along with the virus aid bill. While the president hasn’t explicitly threatened a veto, his defiance of a deal negotiated by his own administration could spark a standoff that could conceivably last until Joe Biden is inaugurated Jan. 20.

………

House Speaker Nancy Pelosi (D-Calif.) announced Wednesday that Democrats would seek to pass a bill at a short Thursday House session that would provide $2,000 checks, though the measure could easily be blocked by Republicans, as it would require unanimous consent from House members.

I would note here that Pelosi could bulldoze her way through the requirement for unanimous consent, but she doesn’t want the $2,000.00 payment either. 

They could write a 2 page bill, and get it though in 1 or 2 days.

It would be good politics and good policy, but for whatever reason, Pelosi is not willing to call Trump’s bluff.

The politics of this are fascinating:

………

Trump started by decrying “wasteful” spending in the relief bill, tallying up a bunch of funny-sounding programs (amberjack fish, haha! Asian carp! Poultry production technology!). I believe all these programs are in the omnibus section of the bill, not the COVID relief section. First, it’s a stupid gimmick to define programs in a couple words that are actually pretty vital. (Poultry production technology would add efficiencies and perhaps save lives in the production process, to use one example. Here’s an entire conference about it.) Second, the spending, while not wasteful, also doesn’t add up to much. The fourteen programs explicitly identified total $3.849 billion, in a bill of $2.2 trillion (between the $1.3 trillion discretionary spending and the $892 billion in COVID relief.

Trump went on to say that the $600 direct payments in the bill were “ridiculously low,” and that he wanted $2,000, gesturing toward cutting the “wasteful” spending and using the proceeds. Trump didn’t quite say he would veto the whole package, just that he would “ask Congress to amend” it.

For the record, it would cost about $380 billion to increase the value of the payments by $1,400, and Trump identified $3.8 billion. I did the math, his calculations would add $13.91 to everyone’s check. But the numbers sound big in nominal terms, so he gets away with relying on the innumeracy of the public. But who cares about the cost when people are suffering? We have skyrocketing poverty and falling personal income. Checks for $2,000 are obviously better than $600.

………

But that universe of people, while in need, is about 2-3 percent of the total workforce. By contrast something like 80 percent of the public, everyone making $100,000 or less, is getting the check. From a messaging standpoint of “what’s in it for me,” that’s just going to take precedence. Moreover, you can see the two payments, from CARES and this bill, as a leveler of decades of soaring inequality, and really the least you can do for a population that has had the rules of capitalism rigged against them. Even if they weren’t means tested, giving everyone thousands of dollars means more to those at the lower end.

The politics, then, argue for higher payments. It was Mitch McConnell and Senate Republicans who kept them artificially low. Now here comes Trump asking for them to be nearly tripled. It’s amazing that he waited until after losing the election to flash the old-time populism and wedge both parties, but here we are. And then came the moment where Mitch McConnell’s head blew up like in Scanners.

………

As soon as Trump posted that video, I suggested that the House pass a one-page bill, increasing the checks from $600 to $2,000. Much to my delight in seeing that political instincts in the Democratic Party aren’t totally dead, about 10 minutes later, Nancy Pelosi suggested the same thing, saying she would offer unanimous consent to amend the bill. Reps. Rashida Tlaib (D-MI) and Alexandria Ocasio-Cortez (D-NY) even wrote the amendment. (I gave it a name: the $2,000 Does Offer Long-Lasting Available Relief or $2,000 DOLLAR, Act.) Eventually, Chuck Schumer got on board as well. Joe Biden hasn’t said anything, but he was on the record for seeking more money when he became president. So the Democratic leadership beat him to it, and called Trump’s bluff.

Now, a word on “unanimous consent”: it would be better to just pass a bill in the House, and demand its takeup in the Senate. Unanimous consent needs to be, well, unanimous; one Republican House member can derail it. If you move a bill, every House Republican has to go on the record of whether they stand with Trump for spending $380 billion in a direct transfer to low- and middle-income people. Every one of those that doesn’t gets a campaign ad in 2022 about how “you needed that extra money, and Congressman X voted to not give it to you.” So yes, #ForceTheVote.

This puts McConnell in a terrible spot. There’s an election in Georgia in two weeks that will determine his Senate majority. The only reason McConnell passed this bill is to save Kelly Loeffler and David Perdue’s careers and preserve his control of the Senate. He put an artificial $900 billion cap on it, which Donald Trump and Democrats now are united in regarding as puny. If McConnell resists the change, he’s all alone in denying money to the American people. These checks poll extremely well, and both Democrats in Georgia are already running on the $2,000 level. If McConnell resists, losing the Senate is a much likelier scenario. If he doesn’t, people get $2,000.

………

There are so many amazing subplots here. Trump can’t stand McConnell for abandoning his overthrow-the-election gambit, so he sticks in the final knife. The threat, by the way, is real: there are only 10 days left in this Congress, and Trump doesn’t have the bill yet (which is being “enrolled,” essentially double-checked for errors). He could “pocket veto” the bill and just not sign it, and in 10 days the clock would run out, and there would be no bill for anyone. The new Congress would have to start all over.

This would be a disastrous scenario—unemployment programs would expire, the eviction moratorium would lift, and more. Already this snafu is delaying the flow of relief. And the only man holding it up is Mitch McConnell. This upends the entire shift of the multi-racial working class away from the Democratic Party, and re-focuses the spotlight brightly on McConnell. Trump handed the Democrats a total gift here, and if they play it right, the payoff for people—literally—will be incredible.

Pass the popcorn.

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.

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!”

Jason Furman Sucks Wet Farts from Dead Pigeons

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This you? https://t.co/feb7Ndm4kO pic.twitter.com/Y08lUEx5dw

— Capricciola🦉 (@Capricciola) November 16, 2020

Obama Administration #1 Wanker

One of the suggestions fro boosting the economy, and one that does not have to go through what will likely be a Republican Senate, is the mass forgiveness student loans.

It would have the effect of removing a burden from millions of recent, and not so recent, college graduates, improving their credit scores and making them more likely to make big ticket purchases, start families, etc.

Jason Furman, one of the strongest advocates of austerity in the Obama administration thinks that this is a bad idea, which, in an of itself, is probably the strongest endorsement for such a policy that you can find.

The post financial crisis economy was a recovery only for the Wall Street banks bailed out, the insurance companies bailed in by Obamacare, and other parasitic speculators who had the ear of Obama, Geithner, and their Evil Minions™.

For some reason ordinary people getting a break is beyond the pale for the Democratic Party establishment (There is no Democratic Party establishment):

Since the election, the Prospect has been getting a certain degree of attention for a series we did last fall called the Day One Agenda. In it we posited a number of things a Democratic president can do without having to pass new legislation, comprising a full and robust agenda of tangible progress. Considering that Joe Biden may face a hostile legislature as president, with control of the Senate in the hands of Mitch McConnell, the Day One Agenda has taken on new importance.

One of the more high-impact (and controversial) of these measures is the Education Department’s ability to cancel student debt under something called “compromise and settlement authority.” The federal government directly issues almost all student debt, and has the discretion to reduce balances completely, or anything short of that.

Since Chuck Schumer and Elizabeth Warren have been calling for student debt relief by executive authority, it appears that the powers that be are getting nervous about something actually potentially happening, as they’re fashioning a list of reasons to shoot it down. Former Obama administration top economist Jason Furman is taking the lead on this. He started by insisting that student debt forgiveness would be taxable, which… no. There’s a long history here, but suffice to say that the government forgives student debt all the time without making it a taxable event, and the IRS has every discretion to follow its past rulings (and remember this will be Biden’s IRS) and say that student loans are a non-taxable scholarship.

Undaunted, Furman admitted “some ambiguity” with his claim (which I guess is the new way of saying “I was wrong”) but nevertheless stated that student loan forgiveness wouldn’t be worth it because it would only be a “small positive” multiplier from an economic standpoint. “Give someone $10 a year for 10 years and they won’t spend $100 more today,” he wrote.

Now, there are a million reasons to cancel student debt that aren’t economic in nature. Student debt acts like a medieval indenture and if we have the power to eliminate it we should. But on the economic point, what we’ve done with student debt during the pandemic (which maybe Furman doesn’t know about?) makes it more urgent that cancellation proceed on the first day in office. 

……… 

The Trump administration put that pause in effect back in March—there’s that executive branch power flashing again—meaning that 33 million Americans have not needed to make student loan payments since then. This has been an unsung part of the economic effect of coronavirus relief: taking hundreds dollars a month (the average payment is $393) off the books of 33 million people really improves their budget.

But this is coming to an end. Last week the Education Department started informing borrowers that the freeze on payments ends December 31. At one point President Trump said he would extend it, but that was before the election was RIGGED and all non-spiteful governing stopped. So 33 million Americans will have the sudden shock of an additional large bill, with many of them out of work and having exhausted their pandemic assistance and even unemployment benefits.

………

There are those who will preach about the unfairness of it all, that those who didn’t go to college or paid off their loans get nothing. This pitting of people against one another is bad even in the best of times. (There are also plenty of executive actions you can pair with this to make it broad-based; seizing drug patents to lower prescription prices, for example, or high-road contracting that would force all federal contractors to pay a $15/hour minimum wage.) In the worst of times like right now, it’s downright stupid. Forcing billions in payments back would hurt everybody. The family that has to pay again will eat out less, or put off that new piece of furniture they wanted. The entire economy will get socked.

It’s not seizing drug patents.  It’s called compulsory licensing.

Big pharma still gets its vig, it just does not get to print money.

Because Trump likely won’t budge, we’re going to have a chaotic three weeks (absent Congressional action) when student loan payments are back. Biden can make this significantly better in a very visible way. And he can do it by himself.

Do this.

There will be gnashing of teeth from the Republicans and the conservative wing of the Democratic Party (but I repeat myself), but who gives a crap.

F%$# them with Cheney’s dick.

H/t Atrios.

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.