Over one million unemployment claims were filed last week, according to data from the Department of Labor (DOL), rising to a seasonally adjusted 1.106 million for the week ended Aug. 15, from an upwardly revised 971,000 in the prior week. The national economy has regained only 9.3 million of the 22 million jobs lost between February and April.
Arizona’s jobless rate shot up six-tenths of a point between June and July and now stands at 10.6%. Arizona continued to shed jobs in July, exceeding US unemployment rate: The increase announced Thursday now puts the state’s seasonally adjusted unemployment rate higher than the federal figure of 10.2% for July. In fact, the national rate actually declined last month even as Arizona was shedding more jobs.
The New York Times reported, Unemployment Claims Rise as Rollout of $300 Benefit Lags:
The job market shows signs of softening, even as a move by President Trump to replace lost unemployment benefits is struggling to get off the ground.
President Trump bypassed Capitol Hill this month to provide a $300 weekly supplement, drawn from [FEMA] federal disaster funds, to those receiving unemployment pay. But by Thursday, fewer than a quarter of the states had been approved for the program, and only Arizona had put it into action.
This should be raising questions from reporters. It was previously reported that the FEMA federal disaster funds that Trump is “appropriating” to shift to the states for unemployment assistance was going to require an entirely new accounting program, separate and apart from the programs that were set up after the CARES Act in March, and it could take weeks to set up.
Please explain to me how Arizona is providing this $300 through its existing unemployment program, and somehow bypassing this cumbersome new program that was supposed to be set up. Is this even kosher?
As The Times explains:
Florida, New York and Texas have held off on applying as they seek guidance on the program’s rules and mull the technological needs for processing payments. Even states that intend to take part, like Pennsylvania, have raised doubts about whether it is workable.
“The president’s convoluted, temporary, half-baked concept has left many states, including Pennsylvania, with more questions than a clear path forward,” said Penny Ickes, a spokeswoman for the Department of Labor and Industry in the state’s Democratic administration.
Again, how is Arizona somehow bypassing this cumbersome new program that was supposed to be set up? If it’s not done legit, are beneficiaries at risk of the state demanding return of the funds should the state get into trouble for not properly accounting for the payments? Will Arizona enact forgiveness for beneficiaries who receive the unemployment benefits if the state gets into trouble? I have clients who are concerned about this.
Something is out of sorts here and requires further explanation.
Then there is the limited amount of FEMA disaster relief funds available:
Trump’s executive action caps spending on the program at $44 billion, a figure that officials from the Federal Emergency Management Agency and the Labor Department said Thursday should be enough to last four to five weeks. The funds are intended to be retroactive to Aug. 1, so recipients might be paid only through early September.
Or not …
While longer-term federal relief is unresolved, FEMA has approved Arizona, Colorado, Idaho, Iowa, Louisiana, Maryland, Missouri, Montana, New Mexico, Oklahoma and Utah for access to three weeks of funds for the $300 supplement. Officials from FEMA and the Labor Department said on a conference call with reporters on Thursday that FEMA had approved $2.4 billion in grants so far and that an additional eight states had applied for funds.
Note: A client of mine received $600 last week (for 2 weeks), so that only leaves one additional payment for the pay period ending last week. This is only for 3 weeks in August, or $900. The client is also receiving a lesser amount than Arizona’s maximum $240 regular unemployment insurance. (As of July 2020, average rent for an apartment in Phoenix, AZ is $1,318). September is looking bleak, and Governor Ducey’s eviction moratorium expires at the end of October.
Arizona was the first state to make the so-called lost wages payments, sending $96 million to 320,000 people on Monday and Tuesday (last week). But the timeline for payments “will be all over the map,” potentially taking several weeks, said John Pallasch, the assistant secretary for employment and training at the Labor Department.
Again, how is Arizona somehow bypassing this cumbersome new program that was supposed to be set up?
The challenges include reprogramming antiquated state computer systems to handle the new benefit — a factor that caused weeks of delays with the $600 supplement — and dealing with an additional federal agency, FEMA.
“We have to build a whole new subset system with new rules and new reporting requirements with a department that we’re not really familiar with,” said Bill McCamley, the secretary of the New Mexico Department of Workforce Solutions. “We want to dot all of our i’s and cross all our t’s.”
In a call with reporters on Wednesday, Gov. Andrew M. Cuomo of New York expressed concern about the legality of Mr. Trump’s executive action and said that “if the states need to reinvent their unemployment insurance administration program, it will be weeks or months before anyone gets a check.”
“I’d rather do business with the old-time bookie on the street corner than do business with FEMA,” Mr. Cuomo added.
As I said, something is out of sorts here and requires further explanation.
The Washington Post added, President Trump’s attempt to bypass Congress on stimulus is offering only limited economic relief:
After talks with congressional Democrats faltered, the president on Aug. 8 signed four executive actions aimed at staving off further economic turmoil. They included a $300-per-week benefit for jobless Americans, after the previous enhanced benefits expired in late July. Trump also directed a deferral of payroll taxes, as well as a halt to evictions and a suspension of student loan payments.
But Trump’s directives have so far produced limited economic relief for Americans hurt by the coronavirus pandemic, despite promises by top White House aides that help would come within weeks. By Friday, only Arizona had started sending the extra $300 to its residents.
Thirteen states have been approved to give the enhanced payments, and some, including Montana and Kentucky, will kick in a $100 match, meaning out-of-work residents there could get up to $400 in enhanced benefits. Many other states either have said they’re applying or have not said whether they will move forward and offer the payments. South Dakota has turned down the jobless benefits.
There’s a governor with a political death wish.
For the majority of the 28 million unemployed workers who had been getting an extra $600 a week, relief remains elusive. Just last week, jobless benefit claims rose slightly compared with the previous week, to more than 1 million. It’s the 21st week that unemployment claims have topped 1 million during the pandemic.
* * *
The administration’s assessment of the timing of the benefits has almost certainly proved too optimistic. So far, only Arizona has reported sending the extra $300 week on top of traditional state unemployment benefits, according to Michele Evermore, an unemployment expert at the National Employment Law Project, a nonprofit.
Numerous governors have complained that the program is too complicated and could take several more weeks to set up. The White House also stipulated that people receiving less than $100 per week in unemployment benefits from their states are not eligible for the extra $300, effectively preventing as many as 1 million jobless Americans from receiving the benefit. And guidance from the Federal Emergency Management Agency — which manages the disaster relief fund that’s being tapped for the payments — suggested the extra benefit would last only three weeks.
About 20 states have said publicly they will apply for the program. Most are expected to need anywhere from “at least a few additional weeks to a couple additional months” to get the money out, said Evermore, who has been in regular contact with state unemployment officials. Some states may not be able to send the new payments out until the end of September, Evermore said.
Exacerbating the delays are financial and technical challenges, requiring states to update computer systems that in some cases are decades old. Similar upgrades kept some Americans from receiving their jobless aid for weeks or months earlier in the pandemic, as labor officials struggled to implement the new programs authorized under the $2 trillion Cares Act.
Again, how is Arizona somehow bypassing this cumbersome new program that was supposed to be set up?
State unemployment officials have said that it would be easier if Congress adopted a new coronavirus aid package rather than piecemeal programs that require constant computer fixes. There appears to be little chance of that happening soon.
Republicans are in not interested in providing any additional unemployment assistance after the end of August:
Trump and his economic team have repeatedly suggested that the executive actions largely render talks with Congress unnecessary, with the president saying that they would “take care of pretty much this entire situation.”
* * *
[T]he lack of urgency in reaching a deal on an aid package also reflects the White House’s view that no more federal help is needed to stimulate the economy. Kudlow has repeatedly said that the United States has now entered a “self-sustaining” recovery.
These guys are all members of the investor class, aka the predator class who make their money by placing bets in the big casino of the stock market. Trump and his economic advisers only care about what the stock market and Wall Street are doing, not Main Street and small businesses and the American worker.
Stock markets — one of Trump’s favorite economic indicators — have soared even without an additional federal stimulus package. Sales of previously owned houses skyrocketed in July by a record 24.7 percent, the National Association of Realtors reported Friday, thanks to cheap mortgage rates.
“The economy right now is in a very strong rebound, which in my view is a self-sustaining recovery,” Kudlow told reporters Thursday. “I’m not making this stuff up. These are the government statistics … the stock market is correctly portraying a V-shaped recovery.”
This guy is a complete idiot. Axios recently reported, Investors still don’t believe the stock market’s rally can last.
And just to be clear, the stock market is not the economy, as any credible economist will tell you. Trump Raved About The Stock Market Recovery. The Actual Economy Is Faring Much Worse.
Critics have long argued the stock market is a poor indicator of the country’s overall economic performance, and Tuesday’s resounding stock market success juxtaposed against widespread economic despair brought that reality into stark relief.
As Catherine Rampell of The Post explained, The U.S. has two economies. How much longer will the losing side stand for that?
Nobel Prize winning economist Paul Krugman explained, Stocks Are Soaring. So Is Misery.
There are warning signs building on the economic horizon:
- The Post reported, Serious mortgage delinquencies soared to a 10-year high last month. Trump’s toothless eviction executive “memo” did nothing to address this threat.
- Bloomberg reported, Corporate America Is Choking on Debt and Imperiling the Recovery.
- The Post reported, Millions fall back into crisis as stimulus and safety nets disappear.
- CNN reported that Jobless Americans Surviving on Less Than $200 a Week in Some States. Let’s find out if Larry Kudlow can survive on that.
- The Times reported, Economic Data Points to Pause in Recovery as Aid Programs Expire.
- Axios reported, Economists foresee an unemployment “tsunami” coming.
- The Post reports today, Permanent job losses to rise, economists predict, putting recovery at risk.
- CNN reports today, We’ll be stuck in recession for years, economists say.
- N.Y. Times business columnist Steve Rattner writes today, The Economic Recovery That Isn’t.
Does this sound like your $300 supplemental unemployment benefit for three weeks in August has “taken care of pretty much this entire situation” as Trump says?
Yeah, I didn’t think so.