Unemployment Claims Still Cast Doubt On the Jobs Recovery

Mish

The worst may be over but the recovery is painfully slow.

No Progress Since October 3

On October 3, initial unemployment claims were 767,000. Since then, initial claims meandered from a November 7 low of 711,000 to a high of 927,000 on January 9. 

I see this as four months of no progress so I question reports like today's WSJ article Winter Layoffs Show Early Signs of Easing

The worst of the pandemic’s effects on the job market appear to have passed, said Aneta Markowska, chief economist at Jefferies LLC. 

Things are really starting to improve again in the labor market,” she said.

The worst was over four months ago. But are things really starting to improve? 

They might, but it is not in the data yet. Here's a curious statement from the article.

“It’s still hard to say how quickly things will bounce back from the winter slowdown, but it does seem like things are trending in the right direction,” said Daniel Zhao, senior economist at job site Glassdoor. December payrolls mainly fell because companies were reluctant to hire workers, not because they were laying them off, he said, referencing a recent Labor Department report.

Payrolls do not fall from lack of hiring. They only fall when more people leave than are hired.

That said, lockdown restrictions are easing as are the number of Covid cases so perhaps we will see some hiring in the hard hit leisure and hospitality segment, but let's not jump the gun. 

Continued Claims

Continued State Unemployment Claims  2021-02-11 Report

We have seen slow progress in continued unemployment claims but much of this is masked by people expiring all of their state benefits and falling off the roles onto various federal programs.

The federal numbers are so skewed by fraud, reporting errors, and double counting distortions that I stopped posting them.

Powell Says the True Unemployment Rate is Actually 10%

Yesterday I noted that Fed Chair Jerome Powell said the True Unemployment Rate is Actually 10%.

That is far more believable than the BLS assertion that the unemployment rate is down to 6.3%.

However, Powell went off the deep end regarding one of the alleged cures. Please click on the above link for discussion.

Mish

Comments (12)
No. 1-8
Doug78
Doug78

As you said much of the unemployment comes from the leisure and hospitality sector. Hopefully with Covid declining (at least for now) restaurants will open up and people will star traveling again. There is a lot of pent-up demand but the offer will be les, perhaps much less since many restaurants and hotels have gone bankrupt. It will take time to re-establish them. Additionally people who had previously been attracted to work in the sector may hesitate to do so because they see this sector as being very vulnerable unless of course they have no alternative.

Six000mileyear
Six000mileyear

The airline industry is in labor purgatory. Air travel is still down 60%, but layoffs at plane manufacturers have reduced headcount by 25%. For Boeing to reduce headcount further, it will have to train existing people for multiple steps in the build process. The quality of the planes will be compromised.

PecuniaNonOlet
PecuniaNonOlet

There is a bit of coronavirus paradox in the near future. Many restaurants and other businesses have shut down for good. That means when things start to return to normal there will be fewer restaurants/bars pushing many people to fill the few places that do open. When that happens it will make it fertile ground for faster covid spread. Rinse and repeat over and over.

It is a long road to getting many vaccinated.

Corvinus
Corvinus

Only 5 comments? Here let me help: TRUUUUUUMPPPPP!

Realist
Realist

Any jobs recovery will be linked to effective control of the pandemic; which will be linked to vaccine effectiveness and a willingness of enough American citizens to take the vaccine. Since this virus appears to be endemic, it will require continued vigilance on the part of all parties: government, business, and the public. My best guess, is that Americans are simply not up to the task of doing what is necessary. If Americans were up to such a task, you would not have the high levels of obesity, diabetes, cardiovascular disease etc. in your country today. This suggests that America will do a poor job of controlling the pandemic, which will result in a rather tepid jobs recovery. Combine that with a general unwillingness of Americans to upgrade their skills and education, and the jobs recovery will be a faint light at the end of a very long tunnel.

numike
numike

US Printed More Money in One Month Than in Two Centuries
The Federal Reserve’s money printer has cranked up to ridiculous levels — but will it really lead to inflation? https://cointelegraph.com/news/us-printed-more-money-in-one-month-than-in-two-centuries

One-armed Economist
One-armed Economist

TX Unemp can't be reached by phones (to overloaded) so God knows how bad they are underreported. NC 3 months behind, KS 2 months behind. There is a huge amount unreported and unaccounted for. Like never before.


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