Initial Claims Remain Above 1,000,000
The US Department of Labor reports In the week ending August 22, the advance figure for seasonally adjusted initial claims was 1,006,000, a decrease of 98,000 from the previous week’s revised level. The previous week’s level was revised down by 2,000 from 1,106,000 to 1,104,000. The 4-week moving average was 1,068,000, a decrease of 107,250 from the previous week’s revised average.
The string of 20 straight weeks above the million mark just ended 3 weeks ago but claims are back above that milestone for the last two weeks.
Continued Claims in 2020
Continued claims, not initial claims show the real problem.
Continued state unemployment claims showed a bit of further improvement but progress is agonizingly slow with continued claims at 14,535,000.
The BLS reference week for the next jobs report is the week that contains the 13th of the month. That’s the week that determines the official unemployment rate.
Last week I stated “If trends hold, continued claims for the reference week will be about 14,500,000.”
Here we are.
At the current rate of improvement claims will be above 10 million for months.
The reference week pertains to the BLS jobs report on the first Friday of every month. The data suggest a slight improvement in the official unemployment rate, not to be confused with the real unemployment rate.
Perspective on Continued Claims
Only a long-term picture describes the unprecedented nature of what’s happening.
Four Continued Claim Factors
- Continued claims lag initial claims by a week.
- People can find a job and drop off the unemployment rolls.
- People can expire their benefits and drop off the rolls.
- People can retire and drop off the rolls.
Note: My Initial Claims and Continued Claims charts are Seasonally-Adjusted. The following PUA and Totals are NOT Seasonally-Adjusted.
Primary PUA Claims
Primary PUA covers those who are not eligible to make state claims. People working part-time can also claim PUA.
The report lags initial claims by 2 weeks and continued claims by 1 week.
Primary PUA claims hover near the 11 million mark.
PUA claims are not seasonally adjusted.
All Continued Claims
No Double Counting Just Misleading
All Continued Claims is sum of all the various programs.
There is no double-counting as widely reported.
One either applies at the state level or the Federal Level, not both. And one must first apply at the state level.
There are currently 27,017,232 people collecting pandemic assistance. Confusion stems from the fact that not all of those people are unemployed.
PUA allows part-time workers to apply. They will not show up in the monthly jobs report as unemployed.
There are also some collecting PUA who are genuinely unemployed who simply do not qualify for any state programs.
Number of Unemployed
The number of unemployed is somewhere between 14,535,000 (continued claims) and 27,017,232 (all claims).
My guess is around 20,000,000 but the BLS will report far less due to extremely strict counting guidelines plus admitted errors.
Expired Benefits
It’s important to note that those on PUA who are not working part-time have no money coming in.
Individuals must first apply at the state level. If not covered then they can apply for PUA. Persons who qualify at the state level get state benefits plus PUA. This is part of the double-counting confusion.
Those on PUA but not a state program have no money coming in unless they are working on the side.
Due to Congressional bickering the last PUA check is for the week ending July 25. Today is August 20.
Trump authorized another $400 but with states having to supply $100, so really the authorization is $300.
Authorization is one thing sending out checks is another. This will be the fifth missed check for those receiving PUA.
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Point number 4 is particularly ominous.
Mish
A few months ago I predicted Trump would try to postpone the election and this will happen for certain. Votes likely wont be counted until January and the Supreme court will get involved. Count on it. I also expect more white militia groups to initiate violence as we get closer to the election day in order to reduce turnout in critical precincts. These are tactics Putin used in Russia and now Trump will attempt them here.
Give me a break. You need a higher dose of anxiety meds and antipsychotic meds too. You’re delusional.
Please tell me what Biden has proposed to increase viability and expansion of economy as he’s hunkered down in his basement.
“In the week ending August 22, the advance figure for seasonally adjusted initial claims was 1,006,000,”
…
Likely a function (in part) of PPP being exhausted.
SO much of CARES Act was a huge waste. Hundred of $billions to extend the inevitable for a few months (ie: push major damage past election). Can not continue to prop up business destined to fail.
Wish greater emphasis placed on testing / quicker results.
Is A Massive Economic Crash Inevitable? https://www.youtube.com/watch?time_continue=2&v=25vcq3EFaL8&feature=emb_logo
We still don’t have normal economic activity or consumer behavior an we won’t for some time. People aren’t flying , going to movies eating out or going to concerts. Of course that means elevated unemployment. Plus state and local government income is down and there’s a turf war about helping blue states. We still haven’t seen layoffs in the public sector which are coming.
I’m flying and travelling nationally. Quit being women, wear a mask, practice safe standards, and start living.
I predict we soon find out the only reason. Unemployment is going down is because Trump told the BLS to stop counting. The Trump way is to stop counting everything that looks bad for him – covid cases, unemployed and very soon votes.
Normally I would say that that is crazy conspiracy talk because of built in checks of the bureaucracy. But seeing the FDA and the CDC crack under the pressure maybe not.
NOAA also cracked on hurricanes because of pressure of being removed by Trump.
I’d like to take a moment to praise labor. I’ve notice over the many decades of my life, that the hardest working people tend to make the least amount of money. But man, do they ever work hard for it, and without complaint. I am humbled, and I salute you.
It’s concerning the number of initial unemployment claims hasn’t broken convincingly below 1 million. I think panic will hit if the number rises above 1.435 million, the peak level of the last bounce. Companies now have a better idea what the COVID demand is, so they are going to let people go regardless of more government assistance.
Only 5 states have paid out the assistance from Trump’s EO
I wonder what will happen if congress does pass something. Will everyone get back pay from August 1st? Will it have to be calculated against what they got from the EO? The more complicated this gets, the longer it will take the states to disburse the money.
This is where they should be pouring on more bailouts not getting austerity religion. If there was ever a really good reason to print money this is it.
I am a fiscal conservative, but not supporting the lower end of the labor force in this instance is a huge mistake in my view. I don’t care how big the deficit is….just don’t make it such a blatant conduit scheme for the rich this time.
Help the people who need it, not the corporations and the insiders…..just once….could we not give the elites 80% of the “relief” in order to give 20% to the people out of job through no fault of their own?
They want riots for the election, to augment the chaos in the postal and ballot systems.
quote: Disclosure: I’m an investment manager who manages stock portfolios…
Right now, I see the stock markets almost fully separate from the regular economy. I’m speaking with plenty of smart people right now who see the same things and can’t make sense of it. I’m reminded of Alan Greenspan in the late 1990s talking about “irrational exuberance”. Price/Earnings Ratios are far above where I’m personally comfortable. I also see the stock markets bifurcating, where there are a lot of 52-week highs and a lot of 52-week lows, and not as much center channel performance than should be taking place under normal circumstances. Earnings are doing the same thing. Some companies are thriving in this environment, such as IT companies that promote video conference streaming, or AMZN doing delivery. They are leading the way. Big time. Meanwhile, giant energy companies are falling because no one is traveling; there are far less consumers of gasoline, and especially jet fuel. Restaurants, movie theaters, and department stores are seeing their business models coming undone.
We can look to the emergency measures the Federal Reserve initiated earlier this year being the impetus for this current market rally. While it cratered in March, it has definitely rallied back, noting the caveats on bifurcation above.
My fear is that bifurcated markets like this one are largely unsustainable over the long term. My portfolios are absolutely killing it this year, and I’m uncomfortable with how well the broader markets are performing. The Fed has already used up most all of their tools to flood the economy with cash, and I’m scared that this has left us vulnerable to not being able to act should something happen next. When we get to the point where people flat-out stop consuming, we’re in for real trouble. I’m keeping my eyes out for a Black Swan event kneecapping us.
Until then, make hay while the sun shines y’all. DJIA just got positive YTD this morning. Just keep liquid.
Note: This isn’t financial advice, nor a recommendation to buy/sell anything. Talk with a professional.
“I also see the stock markets bifurcating, where there are a lot of 52-week highs and a lot of 52-week lows..” Something like a Hindenburg Omen?
I wouldn’t put a nickel in this market, much less my life savings.
“Right now, I see the stock markets almost fully separate from the regular economy. I’m speaking with plenty of smart people right now who see the same things and can’t make sense of it. “
The “Stock”Market” ” in a financialized dystopia, is simply a thin layer of obfuscation for stealing wealth produced by productive people, for the benefit of connected leeches. That’s it. Nothing more.
Hence, the more wealth is such stolen, tah-dah, the worse off productive people, hence production, hence “the economy” gets. Having your stuff stolen tends to do that to you…..
While, just as tah-dah, again the more wealth is such stolen, the better off those who are handed the loot are…..
Nothing particularly difficult, nor requiring much on the way of “smart people”, to “make sense of.” Just basic, simple arithmetic.
Exactly. These finance guys think they are smart making money in a game that is rigged. They are closer to government handouts masked as trading profits.
They will ALL enjoy the ride DOWN.
At this point if people are still all-in despite – Grexit / Brexit / Trump election / Debt ceiling / whatever “experts” proclaimed market would fall if came to pass – they won’t leave now due to TINA / FOMO. There is no bell at the top … and there will be sharp rallies even in the midst of steep declines.
I would wager big bucks A LOT of investors at low point in March prayed / promised if their portfolio got anywhere near back to high would sell / diversify. And those very same people – as their portfolio neared ATH – breathed a sigh of relief that they didn’t sell / Federal Reserve has everything under control. No liquidation. No Diversification. Keep on trucking.
They had their chance. WHEN the sell off comes, they need to look no further than the mirror for their loss.
The problem is the ride has been driven by a handful of companies who have consolidated market power. We are really mirroring Russia as people like Bezos and Musk morph into oligarchs with enough money and power to move markets. Once the big money goes short the party will truly be over. This market is all about money flows not performance or the economy.
All regimes make up excuses for why it is somehow preferable, or even inevitable, that they retain their privileges. The current set of welfare queens, solely and entirely enabled by central bank redistribution, are no different.
What’s sad, is that lots of people seem to fall for the nonsensical indoctrination, believing “freedom” is some sort of scary thing which the gaggle of incompetent welfare queens need to “manage” for them
Some people will shuffle around and eventually find employment. Some people better be enrolled in Community College classes as we speak and begin their new field.
Some people will end up on the street, some people will smash, burn, and loot….
Who is going to pay it?? do you mean middle-aged adults enrolled in community colleges who will have to compete with fresh-faced millennials for jobs?
Who is going to pay it? The individual. Take out a student loan and pay it back like I did. Nobody ever said this was going to be easy, but it will be beneficial.
Millennials aren’t fresh faced. The youngest millennials already graduated from college. You’re talking about Gen z my friend
The oldest of millenials are either turning 40 this year or already turned 40.
You should lurk a bit in Unemployment communities online. Plenty of people with adequate training and in industries that are supposed to be more resilient in downturns. More tech workers than you might expect – and they’re all willing to accept less pay and lower titles. Hiring freezes have hit white collar workers. Maybe not as hard as service workers but even 10% of 20 million is 2 million.
Been there done that. There is a problem with taking a “lesser” position. Usually a company hiring somebody under that premise, intends to use them and dispose of them, because at the same time that’s what the individual is doing to that company. They are working a lesser position while searching for a better one.
EZ fix,simply apply the same metric that BLS uses for the unemployment “rate”,GDP “rate”,inflation “rate”,ie do not count anyone that applys for UE on Mon,Tue and Wed,just count those that apply on Thur and Fri. You can potentially turn what is a million permanent applicantsper week into the a’seasonally adjusted” norm of 300-400 thousand, 600,000 UE applicants gone,problem solved!
It wont be a day of the week. Every friday people stop being counted. The rate can only go down after about 9 months.