High Unemployment And Economic Stagnation Is Not a ‘Great American Comeback’

I saw a bizarre ‘Great American Comeback’ TV ad from the Trump campaign (or an affiliated PAC) claiming an economic rebound since the coronavirus pandemic state lockdown orders ended, and praising Trump for all the jobs he has “created.”

For those of you old enough to remember this show, I am reminded of Webster from Diff’rent Strokes as the appropriate response to this shameless propaganda.

The AP reported on Thursday, Unemployment Numbers Remain High, 6 Months Since Pandemic Shutdowns:

The number of people seeking [first-time jobless benefits] rose slightly last week to an adjusted 870,000  – [marking 27 consecutive weeks above 800,000] – a historically high figure that shows that the viral pandemic is still squeezing restaurants, airlines, hotels and many other businesses six months after it first erupted.

The pre-pandemic record for weekly claims was 671,000 in September 1982.

Note: The number marks the fourth consecutive week of claims below 1 million since the pandemic shut down the U.S. economy in late March. However, analysts noted this was mostly due to a change in the way the Labor Department makes its seasonal adjustments, which applied for the first time to the last jobless claims report for August. (Without the seasonal adjustment, it would be 27 consecutive weeks above 1 million).

The figure coincides with evidence that some newly laid-off Americans are facing delays in receiving unemployment benefits as state agencies intensify efforts to combat fraudulent applications and clear their pipelines of a backlog of jobless claims.

The Labor Department said Thursday that the number of people who are continuing to receive unemployment benefits declined to 12.6 million [more than double the 6.2 million pre-pandemic number of unemployed in February]. The steady decline in that figure over the past several months reflects that some of the unemployed are being re-hired. Yet it also indicates that others have exhausted their regular jobless aid, which last six months in most states [so they are not counted].

Note: Some of this decline in unemployment is actually due to workers dropping out of the labor force. The Arizona Capitol Times reports, Jobless rate drops, but not because more are working:

The state’s jobless rate shrank by close to 45% last month.

But a good portion of the drop in the seasonally adjusted unemployment rate from 10.7% in July to 5.9% in August has nothing to do with a bunch of Arizonans suddenly finding work. It’s because some gave up.

A lot of them, in fact.

By contrast, the employment levels – the number of folks actually working – went up by just 32,109.

* * *

Doug Walls, director of research administration for the Arizona Office of Economic Opportunity, said the state’s labor force participation in August – the number of people working or looking for work as a percentage of the total adult population – dropped to just 58.5%. That’s the lowest rate on records going back to 1976.

And Walls said that there have been large fluctuations in the labor force in the past few months.

Other figures from Thursday’s report also suggest that the 5.9% jobless rate is a continued weakness in Arizona’s labor market.

There was a gain of 79,200 jobs between July and August. But 44,600 of those were in state and local education – usually folks not on contract like bus drivers, cafeteria staff and custodians – typical at this time of the year. And another 6,900 of the jobs gained were at private schools, largely postsecondary education institutions, also typical for August.

Factor those out and it puts the month-over-month job growth in the private sector at just 23,500. And it still leaves private sector employment in Arizona at 94,700 less than the same time a year earlier.

At the same time, some newly laid-off people are facing delays in receiving unemployment benefits as some state agencies intensify efforts to combat fraudulent applications and clear their pipelines of backlogged claims.

The number of people seeking unemployment benefits each week is still high, and the economy has recovered only about half the 22 million jobs that were lost to the pandemic. Many employers, especially small retailers, hotels, restaurants, airlines and entertainment venues, are struggling. And millions of Americans are facing unemployment with vastly diminished aid since the expiration of a $600-a-week federal benefit [at the end of July].

And the $300 Lost Wages Assistance Trump ordered expired in early September.

In addition to those receiving aid on state programs, about 105,000 others were added to an extended jobless-benefits program that provides 13 additional weeks of aid. This program, established in the CARES Act economic relief package that Congress passed earlier this year, is now paying benefits to 1.6 million people.

The Street adds, Jobless Claims Rise to 870,000 as Pandemic Wears On:

Jobless claims have fallen significantly from a peak of near 7 million in late March but have stagnated at just over 800,000 in recent weeks – roughly four times the levels recorded by the Labor Department before the virus rolled across the U.S., bringing the economy to a standstill.

“While jobless claims under a million for four straight weeks could be considered a positive, we’re staring down a pretty stagnant labor market,” said Mike Loewengart, Managing Director, Investment Strategy with E*TRADE Financial. “This has been a slow roll to recovery and with no signs of additional stimulus from Washington, jobless Americans will likely continue to exist in limbo.“

Indeed, while the economy has regained approximately half of the jobs lost in the pandemic, hiring has slowed in recent months as resurgences of the virus have percolated throughout the country, and as firms and businesses pause and assess their staffing needs amid the economy’s stimulus-fueled, boomerang rebound.

The Rising coronavirus case numbers in many states spur warning of autumn surge: “Twenty-seven states and Puerto Rico have shown an increase in the seven-day average of new confirmed cases since the final week of August, according to The Post’s analysis of public health data.” The Fall Surge Is Here.

Citigroup also announced last week that it will resume slashing its workforce, joining some of its rivals including Wells Fargo that are now reducing headcount in a bid to rein in costs ahead of what is anticipated to be a rising wave of business and personal loan losses.

That is in part reflected in the government’s official employment tally, which as of last month showed that the economy is still out some 11.4 million jobs since March.

Some 11,511 individuals claimed Pandemic Unemployment Assistance benefits last week, while 1.632 million claimed Pandemic Emergency Unemployment Compensation benefits, the Labor Department said.

The New York Times reports, Job Rebound Is ‘Losing Steam’ as Crisis Passes Six-Month Mark:

Six months into the pandemic-induced economic crisis, the layoffs keep coming.

Worse, progress is slowing: Applications for state jobless benefits rose last week, and have been falling only slowly since midsummer.

“Compared to April, they’re trending down, but if you’re comparing to the pre-Covid era they are still so high,” said AnnElizabeth Konkel, an economist for the career site Indeed.

The recent loss of momentum is particularly worrisome, Ms. Konkel said, because restaurants and other businesses that had shifted operations outdoors are likely to begin laying off workers again as colder weather hits Northern states in the weeks ahead.

“We’re losing steam, which is definitely not good heading into the winter,” she said.

In addition to 825,000 people filed for state unemployment benefits last week, the Labor Department recorded 630,000 initial filings for Pandemic Unemployment Assistance, an emergency federal program that covers freelancers, self-employed workers and others left out of the regular unemployment system. That program has been plagued by fraud and double-counting, and many economists say the data is unreliable.

In recent weeks, California and Arizona in particular have reported a flood of fraudulent claims. On Saturday, California announced it would stop accepting applications for unemployment benefits for two weeks while it took steps to cut down on fraud and address other issues.

* * *

The report on Thursday marked a grim milestone: 27 weeks since the flood of layoffs began in mid-March. In most states, workers qualify for a maximum of 26 weeks of unemployment payments, meaning that workers who lost their jobs early in the crisis have begun to see their benefits expire.

An emergency program established by Congress in March offers an additional 13 weeks of benefits for most workers. And a separate federal program will provide extended benefits after that if the unemployment rate remains elevated. But experts on the unemployment system said there was a risk that benefits for some workers would lapse at least temporarily.

In the meantime, unemployed workers are trying to make ends meet without the extra assistance that helped them earlier in the crisis, particularly the $600 weekly federal supplement.

The $300-a-week stopgap replacement that Mr. Trump ordered, Lost Wages Assistance, was drawn from federal disaster funds sufficient for only six weeks of payments. Because the program is retroactive to the week that ended Aug. 1, it lasted through the first week of September in most states.

Confusingly, many workers have yet to begin receiving payments — or are just starting to get them — because many states took weeks to get the program running. So workers in some states will receive a lump sum to cover retroactive benefits, and nothing more.

That’s just unemployment benefits. Millions of Americans have relied on emergency orders put in place by state and local governments that bar utility companies from shutting off services such as gas, electricity and water. Nearly 35 million households will lose their utility shutoff protections over the next month:

However, many of these orders will expire by the end of September, leaving 34.5 million households without shutoff protections, according to a new report from energy efficiency startup Carbon Switch.

Governors and public utility commissions in 32 states passed new utility shutoff moratoriums​ during the pandemic, which prohibited providers from shutting off utilities because of nonpayment. Several states, such as Ohio and Arizona, did not pass new orders but extended seasonal shutoff restrictions during the pandemic. Yet overall, many of these measures were put in place as short-term solutions, so most of the moratoriums are set to expire soon. Ten states have already had their orders expire, but the bulk are lifting in August, September and October, Carbon Switch’s report finds.

Meanwhile, 14 states never issued specific moratoriums at all, instead relying on utility companies to voluntarily keep power on for customers with overdue bills. Yet 8 out of 10 of the nation’s biggest utility companies are planning to return to normal operations by Sept. 15 and will start cutting off customers’ electricity and gas if the bills are overdue, Carbon Switch reports.

“There’s going to be a tidal wave of utility shutoffs,” says Michael Thomas, founder and head researcher of Carbon Switch. That’s because in some states, as many as a third of households are behind on payments.

Then there is the CDC federal order extending the eviction moratorium for renters in the expired CARES Act to the end of this year. Importantly:

This Order does not apply in any State, local, territorial, or tribal area with a moratorium on residential evictions that provides the same or greater level of public-health protection than the requirements listed in this Order.

Arizona has its own eviction moratorium. In an executive Order, Gov. Ducey said the moratorium now extends through October 31 for renters affected by the coronavirus pandemic. To qualify for the continued delay in evictions, the order required renters to notify their landlords in writing by Aug. 21, request a payment plan and apply for rental assistance through a state, city, county or nonprofit program.

It’s not clear to me that the CDC Order will extend this deadline to the end of this year.

Under the CDC Order:

This Order does not relieve any individual of any obligation to pay rent, make a housing payment, or comply with any other obligation that the individual may have under a tenancy, lease, or similar contract. Nothing in this Order precludes the charging or collecting of fees, penalties, or interest as a result of the failure to pay rent or other housing payment on a timely basis, under the terms of any applicable contract.

So it just kicks the can down the road to January 1st, when a tenant can be evicted and ordered to pay months of back rent, penalties and late fees. Kicked to the curb in the middle of winter. And to you landlords: good luck trying to ever collect what you are owed. Happy New Year!

While Republicans insist that the economy has recovered enough that you lazy “takers” do not need any more federal financial assistance, House Speaker Nancy Pelosi is going to make one more attempt to get you the aid you need. House Democrats prepare new $2.4 trillion stimulus plan with unemployment aid, direct payments:

House Democrats are preparing a new, smaller coronavirus relief package expected to cost about $2.4 trillion as they try to forge ahead with talks with the Trump administration, a person familiar with the plans said Thursday.

The bill would include enhanced unemployment insurance, direct payments to Americans, Paycheck Protection Program small-business loan funding and aid to airlines, among other provisions, the person said. To reach the price tag, Democrats would chop roughly $1 trillion from their previous proposal for a fifth pandemic aid plan.

Pelosi directed Democratic committee chairs to draft legislation, according to Politico, which first reported on plans to craft another bill. The House could vote on a bill as soon as next week, but Democrats have not yet finalized on a plan.

The discussions about a relief proposal come as concerns grow about the potential for the U.S. economic recovery, boosted by the trillions in relief Congress has passed this year, to falter. Federal Reserve Chairman Jerome Powell, among other economic experts, has warned the economy could take a hit without more fiscal stimulus.

If you are one of the unemployed needing financial assistance, the only way you are ever going to see the federal government come to your rescue is to vote Democratic in November. Republicans simply do not care. They think that they have done enough for you “takers” already.