Lost Jobs Stay Lost
The chart shows a sharp decline in the number of people unemployed 5 weeks or less.
Unfortunately, that was accompanied by a sharp rise in the number of people unemployed for 5-14 weeks.
Then the number of people unemployed for 15-14 weeks took a sharp decline.
Now, the the number of people unemployed for 15-26 weeks is sharply rising.
Percent of People Unemployed by Duration
Of Those Unemployed
- Of those unemployed, the percentage of people unemployed for less than 5 weeks topped at 61.9%. That percentage is now 19.6%.
- Of those unemployed, the percentage of people unemployed for 15-16 weeks rose sharply to 39.6%.
Number Unemployed by Group
- Less Than 5 Weeks: 3,202,000
- 5-14 Weeks: 5,169,000
- 15-26 Weeks: 6,484,000
- 27+ Weeks: 1,501,000
Number of People Unemployed by Duration 2000-2020
That red line is very ominous. Let’s hone in on what happened during the Great Recession to see why.
Unemployed by Duration During and After the Great Recession
Great Recession Comparison Key Points
- The number of people unemployed for 15-26 weeks in the Great Recession peaked at 3,488,000 in June of 2009. That’s when the recession ended.
- For over a full year, the number of people unemployed for 27 weeks or longer kept rising. It peaked at 4,988,000 in October of 2012 over a year after the recession ended.
Once people hit 15 weeks of unemployment they stayed unemployed for 27 weeks or longer.
Already we at 6,484,000 unemployed 15-26 weeks vs a max of 3,488,000 in the Great Recession.
What If?
If the unemployment trends follows the path of the great recession we will easily have over 10 million people unemployed 27 weeks or longer by the time this mess clears up.
That is not a prediction, it is an observation based on current data.
I do have one prediction and it is not a pretty one.
The number of people unemployed 15-26 weeks is nearly guaranteed to rise in the next jobs report and perhaps the next several jobs reports. Continued claims shows why.
Continued Claims
The BLS reference week for the latest jobs report was July 12-18 at 16,951,000 collecting unemployment.
That was nearly month ago. Continued claims have proven to be stubborn.
Heaven Help Us
Another 4 weeks will pass between jobs reports. So potentially millions more will will roll into the 15-26 week category from the 5-14 week category, now in a steep decline.
If the number of people rolling into the 15-26 category is 1,500,000 or greater, which seems likely, the next jobs report will show 8 million or so people unemployed 15-26 week.
Then in two months, those unemployed 27 weeks or more will start ticking up rapidly.
Heaven help us if unemployment 27 weeks or longer continues for a year after the recession ends.
But that is what happened in the Great Recession.
Panic at the Fed
Yesterday, I noted Yet Another Fed President Supports More Free Money and a Covid Lockdown
Three Fed presidents have now called for more free money from Congress.
Two of them support hard lockdowns of at least 4 weeks.
If that remotely sounds like panic, it’s because it is panic. The Fed is not in control.
It is only an illusion that they ever were.
Gold’s Response to Free Money
Gold has responded and rightfully so.
For discussion, please consider Gold Soars to New High Above $2000 While Managed Money Sat it Out
What about the US Dollar? I am, glad you asked.
For discussion, please see Are the Commercial Dollar Traders Early, Wrong, or Neither?
Mish
Long term unemployment was driven (in2007-08) by extended benefits. My sister in law collected for two years in California.
response to IA hawk comments above.
How many of you in the great depression were from the south, Bible belt, or believers, in 30/40’s ? Becareful. God bless 🙏📝 Looks like some people, stop believing, & said ” where were you?”. Not much talk about that. I think they not dare, & are quiet. Religion is being tested to a maximum!
Once they get past 40 weeks the problem is solved. They don’t count. Unemployment is destined to go down.
My company has done salary freezes / reduction, furlough, early retirement buyouts and recently layoffs for salaried employees, and now early retirement buyouts for unions members. When all is said and done there will be more than 10000 layoffs in my business unit alone. Our other business unit across town is getting hit hard as well. Both business units rely on local machine shops for major production. There are still many, many more layoffs in the pipeline; and they are not going to be cancelled if a vaccine for COVID19 is found tomorrow. There is just too much capacity in the airline industry for the next couple of years. September / October is going form a second peak in the initial unemployment claims.
The other people facing housing woes amid pandemic: Mom and pop landlords
August 7, 2020
There is no other possible solution but to push bankruptcy all the way up the stack; from renters to The Fed.
“liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rottenness out of the system. High costs of living and high living will come down. … enterprising people will pick up the wrecks from less competent people”
,
as Mellon put it back when.
If the dimbulbs-then-in-charge only had the brains and basic economic literacy to follow his advice back in the early days of the financialization rackets; America wouldn’t be a banana republic unable to fend off a virus by now.
An apartment, is currently worth exactly what it will fetch at a firesale auction at a moment in time when everyone in America is bankrupt and hence have noting but their productive output to bid with. We are no longer a country with any net savings put aside, which would allow us to sustainably bid higher than that.
And at those prices, renters can afford to pay rent, while landlords can afford to service their mortgages.
The reason they now can not afford to, is very simple: Rents, and prices hence mortgages, are far too high. Hence needs to be brought down. Lower prices WILL ultimately solve any affordability problem. Always and everywhere.
Not in the county where I live. Apartment prices have hardly dropped from the very lofty levels they were at. The decline since March is all of 2%!
Pandemic brings havoc to San Mateo County housing
Reports: Rents drop, while home values continue rising
By Austin Walsh
10 Aug 2020
….And that’s exactly why we are now a banana republic unable to fend off a virus.
If, OTOH, the dimbulbs-in-chief had followed Mellons advice, reduced cashflow from rent would very much necessitate repricing downward of the apartments which that cashflow supports.
Sucking ever more resources away from productive users and uses, simply to keep levitating idle zombies at a high-life level, is THE path to banana-republic-dom. Wile any path avoiding such a fate, invariably necessitates the exact opposite: Fail-fast recognition of all losses, such that resources can as quickly as possible be redeployed by more competent and enterprising people to more productive ends.
“Lost Jobs Stay Lost”
How many businesses have been canceled by the Covid shutdowns? Sweden took a different route.
You forget how to type “herd immunity?”
Obviously, you understood the route they took. Nature’s remedy.
Another online company, Etsy reporting a blowout quarter. So what if people are unemployed. They have tons of money.
On top of the FAANGS, we now have Shopify, Etsy, all sorts of online channels having blowout revenues and earnings.
No doubt this will rub some less intelligent people wrong. ROFL.
Party goes on.
It took less than a decade for the US to go from a tier1,1st world economy to know a bankrupt,insolvent,3rd world banana republic,that’s got to be some kind of record!
Keep printing money…
Well, you know the old saw by Oscar Wilde: America is the only country that went from barbarism to decadence without civilization in between.
The longer they continue benefits, the longer people take their time looking for a job.
There,…are,…no,…jobs,…to,…be,…hired,…for.
see here,…
Depends on what business you are in. If you are in retail, then woe is you.
OTOH, I know a late 20’s Indian guy involved in engineering design with a Masters here in CA on a work visa who was losing he job he had. Now he managed to score another position with a $15k increase (to $105k). Only downside is he has to move from CA to the east coast.
Plenty of jobs available in coastal NC where I live. I se hiring signs and have people telling me they’re getting multiple offers for jobs when I interview for our business. Maybe this is regional? Anyways….. when you have a boost in unemployment benefits it is definitely an incentive not to work.
Good time to take any job and maybe work two if salary is small. Better something than nothing. I see a lot of people going on diets with bad attitudes. One of my tenants paid 2 months rent up front!!! She’s working 2 days a week and sister is full time. Trump made the right decision to do executive order. It’s good that he is making states pay 25% of the 400 if they want. Here in California, the idiot governor is paying education for illegals and letting out criminals. Where is the common sense? Democrats shooting themselves in foot and building consenus for Trump’s reelection. Nice job on Chicago, Seattle and Portland riots! Morons.
Got gold, silver and BTC?
If anything like last recession past 6 months long term unemployed become unemployable. Especially if over 50. Your resume goes right in the trash without a glance.
I don’t know what all the fuss is about we’re only at 10% unemployment. HAHA
10% and going DOWN. Don’t forget about that 😉
According to ShadowStats, unemployment is at 30%–and that doesn’t count all the unemployed who gave up looking. Not only will there be no “normal,” things are going to get worse. The 20 million people about to get evicted could end up in tent cities, coming to a city near you.
Our economy is never going to be the same. Retail is dead. Who in their right mind would open a retail store? Inventory that can be stolen and the police will do nothing. High rent. Better to have a warehouse and deliver goods. Maybe let who you want to stroll through the warehouse. Restaurants will switch to carry out and delivery. Why dine in? High rents and paying waitresses and dish washers. If you want a place to sit, sit in your car. Maybe have a covered shared picnic bench area in the parking lot.
This has to result in a credit crunch at some point. Defaults started to rise on mortgages in 2006 but it didn’t result in a crash until 2008 and the true pain of a recession until 2009 to 2011. This is only the beginning
Your right on with your analysis. We use to like to eat out a lot but that is all changed and actually we enjoy cooking different things at home. I think the fear factor and the Democrat run cities in crisis will easily get Trump reelected. Membership in the NRA is a 1,000 a month and that is only one organization. Three other smaller organizations have gained members too each month. Hand guns sales, bullets all hard to find. I had to order online and both were had to come by, online stores being bought out in hours for handguns and bullets and a couple weeks to get. Chaos in the streets and Biden getting elected with restriction of gun rights is fueling this. In my 72 years of life I never seen times this scary, not sure how things will turn out just try and be prepared as much as possible.
“Three Fed presidents have now called for more free money from Congress.”
…
Greece-esque bailout … for their masters … aka The Big Banks.
So obvious that Tsipras bought off when he would agree to a $200 billion bailout … and some $185 billion would go straight to Northern Europe banks … leaving a pittance for the populace.
Fed officials beseeching Congress for free money is the only way the bottom 80% will have funds to stay current on debt obligations.
Instead … Let the banks … and their rich shareholders / bondholders … Eat It!
The depth of the problem that the US faces with the virus is due to the denial of expertise of which Trump is the current apex. Prayer to a god is fine, but actual logical approaches to the problem would be better.
No-one, including God, ever promised you an easy life or prosperity. We have lived in a historical aberration here in the US from WW2 on–and it has been clear that many of the things that were assumed to be true about life in the US require hard work, sacrifices, good luck and cooperation to fulfill.
“and it has been clear that many of the things that were assumed to be true about life in the US require hard work, sacrifices, good luck and cooperation to fulfill.”
…
Trial and tribulation for many would make them realize what is truly important.
God always answers prayers. The answers are “Yes”, “No”, or “Not Right Now”. And I believe it’s beyond our comprehension. A good analogy is a dog: I can have the smartest dog in the world, but it will never be able to understand basic math. It just never will. Whatever our minds are programmed with can’t fathom beyond that.
Agreed on prosperity, and that’s a common misconception many people have. In fact, most Christ followers are attacked by the enemy far more often as we become meaningful targets. The enemy doesn’t need to target anyone that’s lost. In regards to hard work, also correct. God ordered Adam and Eve to tend to the garden, even before they fell. Work was a pre-fall event and God has always wanted productivity and not sloth.
American prosperity post-WW2 was based on us rebuilding the world, and having the only Navy capable to protect oil barges. Today the world has caught up technologically. Typically and unfortunately, historically speaking, the only way out of such dislocations in global markets is a major power realignment such as “WW3”. No bueno but history speaks.
NOW you tell me?
Who cares about all this?? The stock market is up up up!!
Eric, is that you?
“Heaven help us” is exactly correct. History has shown time and time again, when people drift too far from God and his rules, that He will realign things until people come back to Him. And that’s exactly what is happening. Pastors are saying that they are ministering more now than they have in years. It’s easy to drift away when times are good and people get distracted. But what do people do when they get desperate? They pray. What is the best way for God to get people’s attention? It’s to take everything away from them until they get their minds right.
Control is an illusion, we never have been in control and never will be. Your “control” can change at the drop of a hat.
Philippians 4:6-7
6 Don’t worry about anything; instead, pray about everything. Tell God what you need, and thank him for all he has done. 7 Then you will experience God’s peace, which exceeds anything we can understand. His peace will guard your hearts and minds as you live in Christ Jesus.
God is not an ATM that “gives you what you want” when you pray to Him, but He always gives you what you NEED. Your understanding of your needs is imperative.
I wonder if God is acting through us Americans to give all those Middle East countries what they NEED i.e. more bombing. Let’s put aside that “Do Not Kill” thingy since that’s inconvenient.
Thank you Hawkeye, for opening my eyes. Americans are truly God’s chosen people on this Earth.
‘Murica: The Fist of God
So amputees don’t need limbs. Good to know.
Getting back to how life was in Summer of 2019 might take us a decade, if we can ever get back to the old normal.
Nope, there’s no way we’ll be getting to the old normal. That ship has sailed off forever. Even before the pandemic, before the dot com boom, the 1970s are gone forever. From this point onwards, the USA will continue its downward path to possibly irrelevance.
I agree with Toki but from a slightly different angle. The 2019 pace was manic and couldn’t be healthily sustained. I doubled my 2018 work travel, already a heavy schedule. Americans are insane.
We’ve never had a recession cause by a pandemic in this country. We’re in uncharted territory. To be going through a pandemic with an ineffectual President an a legislature that isn’t rising to the task is unprecedented but how how that impacts economic activity is anyone’s guess. There’s no comparison. All we know is it won’t be pretty.
The administration did not shut down European travel during their outbreak. That is where the worst of out situation came from. But nice deflection.
A less virulent version of Covid was loose in Los Angeles far before any travel restrictions…who knows, this thing could have originated in the US. Literally everybody I know here in LA had it late Nov, Dec, Jan, Feb, and Mar. Was doing a slower burn thru the population because it was not the D614G mutation.
Here in Missouri, we had long lines to get into urgent care, over the counter medication shortages, cough drop shortages, etc about that same time, and doctors could not tell you why you were sick.
Same in Colorado.