Long-Term Unemployment 1950 Through August 2020
What’s Going On?
The above chart shows long-term unemployment is typically a very lagging indicator. This happens because layoffs increase as recessions grow in length.
U1 is 15 weeks or longer so it took this long to kick in.
BLS Reference Period
The BLS reference period for the household survey which sets the official unemployment rate is the week that contains the 13th of the month.
The reference period for the July Jobs report thus reflects conditions July 12- 18. That is about 15 weeks from the start of this mess.
U-1 Lag
In every instance since 1950 the U-1 Unemployment rate peaked well after the recession was over.
It is unprecedented for U-1 to jump this fast. Normally businesses cut hours, then more hours before mass layoffs begin.
The huge spike in July reflects the immediate economic shutdown.
Number Unemployed 5 Weeks or Less
Number Unemployed 15 Weeks or More
Continued Unemployment Claims
As noted on August 6, Continued Unemployment Claims Are Still Above 16 Million.
For the August report (due September 4), I expect those unemployed 15 weeks or long to spike above 10 million.
If so, that would exceed the previous record set in the Great Recession.
Number Unemployed 27 Weeks or Longer
27 weeks is a key number to watch because most state unemployment benefits last 26 weeks.
I estimate we are another 6 weeks away for that to happen.
Ominous Setup
- Over 30 million people are on pandemic assistance.
- At least 16,107,000 people are not working any hours.
- An additional 15,201,678 people do not qualify for state unemployment insurance but have been collecting $600 weekly assistance checks.
- An unknown number of those 15+ million are working part-time.
Pandemic Checks Stopped
On July 25 the Clock Ran Out on $600 in Weekly Unemployment Benefits as Republicans and Democrats bickered over the next round of stimulus.
On July 29, Trump announced “So Far Apart on Covid Deal That We Don’t Really Care”
On August 5, I commented Trump Weighs Imposing His Stimulus Plan, Constitution be Damned
Those 30 million people will miss there second $600 weekly check tomorrow.
Talks between Republicans and Democrats over continued pandemic benefits have stalled.
It is likely that any deal will be retroactive, but meanwhile, many millions have no means in which to pay their bills.
Mish
That would certainly explain the boom in prison construction,every state is rapidly expanding it’s prison space,they see what coming…here!
I actually think jobs will return more quickly then the great recession. Many unemployed people will turn to stock trading as a career. At this point they have nothing to lose if they cant find a job anyway.
Line at testing sights, not in NJ my daughter worked at one and they cut staff because no one came.
In classic 1984, the stock market struggles with unexpected higher than expected jobs. How can we get to Nasdaq 20k unless we have less job creation and more stimulus ?
Community College. Get retrained now and be as ahead of the curve as you can.
I’m an old dog. I can’t be taught any new tricks.
Ivanka says: aerospace engineer is the way to go
Get a job driving a bus, conductor on a train, etc. All union jobs that will get you a consistent public pension that will last through your life.
For those hit the hardest……..is eating retroactive?
You can go 43 days w/o food, on average. Many fatties in the USA can probably go twice that.
“many millions have no means in which to pay their bills.”
Where’s the proof?”
Good grief.
The checks just stopped!
Other factors: millions making more being unemployed than employed
Forbearance plans
It will take at least a short while for this to kick in.
Then you will have your proof.
The checks will only stop temporarily. This has truly been the greatest recession ever.
iPhone sales up 8%
Nintendo profit up 6 TIMES from a year earlier.
Netflix subscription up. Roku subscription up. Disney subscription up.
Up, up, up.
People are flush with money. I mean, why can’t we have this kind or recession every day?
#BestRecessionEva continues.
All the important things then?
It’ll be the longest recession ever more like.
Honestly it’s either people are bullish, suicidal or delusional.
New iPhones and Nintendo Switches are optional. You can buy cheaper and very good smart phones new. And if you have a smart phone, you can play a lot of games on it. But nah, you gotta spend 300 bucks for a brand new console, plus xxx dollars for the games.
Supposedly Americans don’t have 400 bucks to rub together for an emergency. That’s actually true i.e. for emergencies they don’t, but for stuff like this, it’s limitless.
Tech companies have benefited tremendously from the lockdowns. New stuff to work from home, games to play at home etc Lots more online shopping. Furloughed workers expecting to go back to work. There will be no need to buy the stuff again. Unfortunately as hard times drag on reality will begin to bite.
“Tech companies have benefited tremendously from the lockdowns.”
A very select few, some high profile, of them have: The ones directly making products aimed at entertaining people stuck at home, and at facilitating remote work and social distancing.
For the vast majority of “tech companies”, most paying customers are businesses in other sectors. And those once-were-good-customers have a lot less to buy “tech” products and services with now. As well as a lot less need for traditional sales support, manufacturing, design etc. software, attendant hardware and services.
BTW something you all should know about CARS in the US since you brought it up. It is not the car which an average cost of buying one is relatively cheap (CarPrice/Hour rate in US + favorable financing to spread the cost out), it is the cost of gas, which in the US very cheap, that determines who/why many has cars in the US. After facing an expected health problem, car problems are one of the major problems people face bankruptcy ….you guested right not being able go to work.
About 35% of the cars in the USA are leased (rented) . Wonder what percent get repo’d?
AP story says it all.
WASHINGTON (AP) — The United States added 1.8 million jobs in July, a pullback from the gains of May and June and evidence that the resurgent coronavirus has weakened hiring and the economic rebound.
At any other time, hiring at that level would be seen as a blowout gain. But after employers shed a staggering 22 million jobs in March and April, much larger increases are needed to heal the job market. The hiring of the past three months has recovered only 42% of the jobs lost to the pandemic-induced recession, according to the Labor Department’s jobs report released Friday.
Dead cat bounce.
NFIB:
The PPP loan application is set to close on Aug. 8 after Congress extended the deadline to allow more small business owners to participate. Most small business owners (71%) have used their entire PPP loan. However, 46% of borrowers say they anticipate needing additional financial support in the next six months.
Some small business owners (21%) have or anticipate having to lay off employees after using the PPP loan.
Almost half (46%) of PPP loan borrowers also anticipate needing additional financial support over the next 12 months.
About 23% of small business owners report that they will have to close their doors if the current economic conditions do not improve over the next six months.
Another 22% of owners anticipate they will be able to operate no longer than 7-12 months under current economic conditions.
“many millions have no means in which to pay their bills.”
Where’s the proof?
I am not seeing the supposed mass eviction, mass bankruptcy, etc. Is everything great? Absolutely not. But we are doing fine. Better than expected.
One reason is businesses are running at some capacity especially service industry which is quite a bit of US economy right now. I suspect people are trying work whatever means they can to stay afloat…how long is the question.
“I am not seeing the supposed mass eviction, mass bankruptcy, etc”
…
No one is due to forbearance / moratorium.
Lot of courts are closed down still.
“We” is quite a big word for a population the size of the US, OTOH 5 or 10% unemployment is a good day for some countries, but then again they have shadow economies and maybe higher benefits, however the US might be going that way, yet again several more million people in difficulty in an economy designed for high activity and financial flows… I don’t know.
In Spain though…in Spain big problems, right into “second wave” after months of lockdown and tourist season gone, all on a patched up economy and finance left over from gfc.
I’ll add in a chart from there via zh, if they are using official numbers then it is worse than that
Maybe it will be with less casualties than “first wave” though, or not.
Anda, what are your thoughts on why the 2nd rising wave of cases in Spain but not the others? When did lockdown end in Spain?
It’s not straightforward, particularly since the data is not reliable. They have had various changes of method, which has led to very obvious under-reporting, and which skews comparisons with earlier. Also the testing protocol might have changed. Initially more than half of those who reported symptoms said they were not given a test (and therefore some of those who did have virus were not counted in figures). Now more than half are asymptomatic. I don’t know how many of the earlier wave were asymptomatic either, surely some. Add to this age group being infected might be different. So it is very hard to draw direct comparison as seems possible by the above graph, but factually the number of cases is rising sharply in spite of testing levels being more or less equal.
Even the press and authorities cannot get this detail right, just today the Madrid community and government fell out over comments by a minister who said that Madrid was hiding cases because Madrid said it was only detecting 15% of asymptomatic cases. Madrid replied over half of cases detected were asymptomatic. There it was left, without anyone pointing out that the 15% asymptomatic was really of the total of estimated asymptomatic cases around, tested and untested. So people are talking past each other all the time, usually because they have an agenda.
Matthew Bennett on twitter is a good source for this kind of info.
29 march to 21 june was near total lockdown – THREE MONTHS.
What happened for outbreak to continue ?
First I think they massaged the figure just before opening, to save tourist season amongst other. Add to that that background asymptomatic cases were clearly known to be in circulation. A rise in cases was expected, probably not this much though.
Secondly first wave was strongest in Madrid, this time Cataluña and Aragon, but Madrid is catching up also. Bear in mind only 5% of population are thought to have caught the virus so far (counted and uncounted) so there is room for a new wave.
Thirdly they opened up too much, discos and other more crowded events etc. Also many do not follow protocol (mask wearing, distancing etc.) They started after lockdown with a tailored (fairytale) reality of how the “new normal” would be, then in practice it is just like anywhere else in terms of how people behave.
Fourthly spanish are sociable, they need if not like crowds.
Finally they track “outbreaks”, as if the virus is not now endemic, as if they are out controlling it, herding up cases. To a degree I suppose, the one useful piece of information from this is that it gives info on origin and transmission. So sometimes tourists, sometimes spread through workplace, various immigrants who arrive without permission by boat from north africa are also infected, which feeds anti immigration sentiment. In short a whole mixture of different ways the outbreaks are starting up.
In the north of europe there are alerts going on about rising cases also, but Spain just seems to be ahead again in this respect. Maybe air-conditioning also ? I don’t have a good explanation except maybe higher initial background of cases.
Portugal where I am has settled at a couple hundred infections a day now for a long while. Sometimes a little higher. Most in Lisbon and Porto, larger cities…but the country is a bit more isolated and more manageable locally. In Spain they had the initial second outbreak around Barcelona, no one dared lockdown again (political and due authority reasons) … and then several hundred thousand headed off on local holiday from there. In Lisbon they have kept high infection districts locked down or quarantined the whole time . In Spain some localities are just now trying to enforce this again.
So a mixture of events in Spain, gives quite a difficult picture for people to understand, add in examples of congress not social distancing, or government absent now on holiday, no clear protocol for schooling in September (in theory it starts again) , the economy tanking, etc. … crisis seems on its way.
Thanks. This whole thing is very complex, imo making it very difficult to compare statistics across countries in search of simple causes/explanations.
“In Spain they had the initial second outbreak around Barcelona, no one dared lockdown again (political and due authority reasons) … and then several hundred thousand headed off on local holiday from there. ”
Sounds like the US…… I can just imagine the difficulty Biden, if he wins and attempts to follow what is emerging as Generally Accepted Best Practices for Controlling Covid acoss the world, will have in getting both Red States, and even individual Trumpians in Blue States, to comply with quarantines etc.
Well maybe things are different than your little world where you live.
Credit card debt plunges, driving a decline in overall household debt.
Aug. 6, 2020