Of the 8.5 Million Unemployed, 37% Have Been So For 27 or More Weeks

Doug78

4 years ago

If you want to attract people back into the workplace you have to cut off unemployment insurance and offer higher wages because some have discovered that one parent, man or woman, staying home to take care of the kids is cheaper and more satisfying than a bad cubicle job. I am glad that wages are finally rising and that employers are having to bid up. For twenty years we had a situation where inflation was low but wages stagnated much more than inflation leading to an enormous loss of purchasing power for everyone but the upper classes. We needed a big shakeup and we are getting it now. It was long overdue and I don’t know where it will end up but I do know that what was going on before was not sustainable and was killing the middle class and the political class didn’t care one wit. I am very glad that they are unsettled and lost. They brought it on and they will ultimately pay the price. The wheel turns.

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TechLover1

4 years ago

That small downward change in June and July in the red line corresponds to 1.6 Million who lost extended unemployment in July.

7.5 million additional people lost those extended benefits this week. I suspect the red line will plunge in next two readings (Sep and Oct numbers that are announced in Oct and Nov).

Details at https://www.washingtonpost.com/business/2021/09/05/unemployment-benefits-economy/

Look at the first infographic in the WaPo article above for full details.

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TechLover1

4 years ago

Mish,

Thank you for the informative post.

I have a question: I notice that in most of your graphs, you use end of recession as April 2021. What is the reason for this?

Officially, the recession ended after two months per NBER (Feb 2020 to April 2020). Here is their official link: https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions

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Mish

4 years ago

Reply to TechLover1

The reason – a mistake by me

Thanks

Will correct

I updated my recession chart incorrectly on the announcement and used it ever since

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paperboy

4 years ago

problem is most state unemployment cuts off at 26 weeks. anybody on beyond that was on federal. so when the fed ends many people drop off, employed or not.

Me, I said heck with it, quit looking for the jobs that weren’t there (full or part time) and retired

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Eddie_T

4 years ago

I think the unemployment numbers will get appreciably better in the next report, UNLESS….unless COVID keeps rising. Hopefully we see delta peak and fade, leaving lots of immunity in its wake. That’s what we need to see.

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TechLover1

4 years ago

That “27 weeks or more” red line is most likely people on extended unemployment and PUA etc. There is a clear downward trend in the red line when half the states stopped extended unemployment and PUA supplement.

Expect another big inflection point in the red line for Sep/Oct readings which will come out in Oct/Nov.

Schools are open now as well so many people who couldn’t work because they had no childcare while kids were remote learning should be able to go back to work as well.

Things should start getting much clearer in the next two months regarding “employee shortage”. If this shortage persists beyond Nov, it means the underlying employer/employee power balance for low wage jobs has shifted in employee’s favor long term and this has huge implications for business profit margins which will be squeezed and high inflation in service prices going forward.

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williamuber

4 years ago

Reply to TechLover1

Its not If this shortage persists beyond Nov. It will continue beyond Nov.

People want to blame this on extended unemployment and PUA etc. This is what you get for shutting a entire country’s economic system down.

At least 1,000 schools in 35 states have closed for in-person learning since the start of this school year:

The cost of child care is higher for families in 2021. 85% of parents, compared to only 72% in 2020, report they are spending 10% or more of their household income on child care.

Roughly 2 million more people than expected have joined the ranks of the retired during the pandemic.

Experts say the full cost of COVID-19 may only start to show up in the coming year, as mental health challenges, pandemic-delayed treatment for various illnesses and the virus itself could prompt more employees to claim or extend short- or long-term disability.

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williamuber

4 years ago

Reply to williamuber

Consumers are spending more on groceries and shopping more often as the pandemic induced “out of stock” fears are still prevalent especially with the surge in the Delta variant.

According to a recent report by the Housing Crisis Research Collaborative, 10 percent of all landlords collected less than half of their yearly rent in 2020, with those who own one to five properties more likely to have tenants “deeply behind” on their rent.

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TechLover1

4 years ago

Reply to williamuber

Good points williamuber.

I would say that the red line will just plummet soon because retired, disabled etc don’t count as unemployed. By definition, once extended benefits and PUA expire, there will be a much smaller number on the red line graph.

Several of the retired, not looking for jobs etc folks will join the work force next year as inflation kicks into high gear and COVID recedes.

I agree that it will take a lot longer than Nov for the worker shortage to ease for the low wage sector.

The red line will come down soon enough though.

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Johnson1

4 years ago

Reply to williamuber

yep….I have a couple of friends whose 401ks have almost doubled from around $1 million to now almost $2 million during covid and they have joined the ranks of the retired. Covid pandemic was very good for them.

I have another friend who decided to upgrade where he lives from a $450k house to a $800k house because his 401k and stocks have gone up so much (over 800k increase the pandemic). Also he and his wife work form home so this house has two home offices and 5 bedrooms.

Also his 26 year old just took a higher paying job that also allows him to work from home. This son bought a house 3 years ago for $250k and just sold it for $350k and pocketed $100k. He can work from home and moved into his parents new big home that has 5 bedrooms. They converted one of the bedrooms into his office.

Nice to be 25, over $100k of cash, and and have a nice high paying job.

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Siliconguy

4 years ago

Question: if a person graduated college in 2020 but still hasn’t found a job, where would they show up on the statistics? Since they never had a job they never qualified for any sort of unemployment.

On a related note, is anyone else seeing an awfully lot supposedly entry level jobs that require three to five years of experience?

And for those who are about to claim “there are lots of jobs here” please define “here”, at least as far as state or part of state. Eastern Washington is dead unless you have a CDL or those three years experience.

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Six000mileyear

4 years ago

If there is a sharp change in unemployment numbers following the end of extra unemployment payments; then we will know there was no lack of skilled labor, or minimum wage being too low.

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Of the 8.5 Million Unemployed, 37% Have Been So For 27 or More Weeks

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