Unemployment Trends: How Many Layoffs are Temporary?

Mish

Let's take a look at how the BLS classifies the unemployed.

Unemployment Classifications

A-11 Unemployment by Reason 2020-10

The above image is Table A-11 from the monthly jobs report.

My chart shows all of the lines highlighted in yellow.

The note explains why the numbers may not add up. They never do. The total of everything in yellow is 11,018.000. 

Separately, the BLS says the "total unemployed" is 11,061,000.  That's the official number but it is realistically low by many millions.

Great Recession vs Pandemic

Unemployment Levels in Thousands 2020-10 A

The trend of the line in red, "Not Temporary Layoffs" is troubling. 

The BLS says there are 4,507,000 "not temporary" layoffs and 3,684,000 "permanent" layoffs. 

I wonder how many people think they will be called back, but won't? 

If people tell the BLS they think they will be called back, the BLS labels them temporary.

The BLS counts "permanent" job losses but only as a subset of the classification "job losers and persons who completed temporary jobs."

The superset of temporary plus non-temporary is 7,712,000. 

The BLS reporting seems more than a bit artificial especially since no one really knows what states will do with restaurants and bars.

Number of People Unemployed for 27 Weeks or More

Number Unemployed 27 weeks or Longer October

There are currently 3,556,000 who have been out of work for 27 weeks or longer. 

The BLS labels that "long-term" unemployment.

Some of the long-term unemployed over the age of 60 will be forced into retirement just to have some money coming in. Others will go bankrupt. 

Expect the number in this category to rise dramatically and keep rising for perhaps a year after the recession is over.

More Shutdowns Means More Bankruptcies

  1. Ohio Gov. Restricts Weddings, Threatens to Close Businesses
  2. 24 States Reach Their Highest Level of Covid Hospitalizations
  3. Utah Governor Mandates Masks and Restricts Gatherings
  4. El Paso Shut Down as 10 Mobile Morgues Fill Up

States are increasing lockdowns again except this time there is no pandemic program in place to deal with the mess.

Layoffs and bankruptcies will soar. 

Already, Hundreds of Companies That Got PPP Loans Have Gone Bankrupt and that only counts the large companies. 

Thousands of small companies have undoubtedly gone under.

This is an economic disaster no matter what distinction the BLS makes between "temporary", "permanent", and "long-term".

Mish

Comments (45)
No. 1-14
Six000mileyear
Six000mileyear

My company is in the commercial air travel business, and an e-mail was recently sent announcing buyouts for executives and furloughs continuing into 2021. Even with promises of a vaccine and Boeing 737-Max certification , business isn't expected to bottom until 2023.

KidHorn
KidHorn

I'm grateful my job is contractually guaranteed.

I think short term, things will be bad, but long term we'll come out better. The weak businesses will fail and be replaced by stronger businesses. For example, there are probably 10 Chinese restaurants and 20 fast food places within a 5 minute drive from my house. No need for that many. Maybe 5 would be more reasonable. The survivors will get more business and they'll be stronger than they would be if everyone survived.

Rocky Raccoon
Rocky Raccoon

We have done very well this year thanks to the pandemic so I am grateful for that aspect of it. Still, you have to be angered by the way government on all levels has handled this putting so many millions of Americans livelihood at risk. It could have been handled so much differently.

Lance Manly
Lance Manly

How does the 3.5 million missing from the labor force work into this, seasonally adjusted:

Oct. 2019 - 164,401
Oct. 2020 - 160,867

There is probably more missing since the labor force grows over the year. Seems lots of these would be older folks that just can't see the point in looking for work given the conditions. I would consider them permanently laid off.

Eddie_T
Eddie_T

I brought all the employees back who wanted to come back....except for one...and it looks like we won’t be adding that job back anytime soon....can’t really afford to, with our new normal.

Anda
Anda

O/T

Ray Dalio

" My problems with Bitcoin being an effective currency are simple. They are that:

  1. Bitcoin is not very good as a medium of exchange because you can buy much with it (I presume that’s because it’s too volatile for most merchants to use, but correct me if I’m wrong)...

  2. it’s not very good as a store-hold of wealth because it’s volatility is great and has little correlation with the prices of what I need to buy so owning it doesn’t protect my buying power, and...

  3. if it becomes successful enough to compete and be threatening enough to currencies that governments control, the governments will outlaw it and make it too dangerous to use.

Also, unlike gold which is the third highest reserve assets that central banks own, I can’t imagine central banks, big Institutional investors, businesses or multinational companies using it. If I’m wrong about these things I would love to be corrected. Thank you."

He misses a main point. Before anything currency is worth what people feel it is worth, goes for gold, fiat etc. You can have an established currency that is stable/widely understood and used because of that, one that is forced, or one that is finding new value that people see as being also an investment because of its rising price or because it holds a combined ability that is not matched and therefore should be held. As BTC is tradable to more widely understood currencies, as well as directly if chosen so between parties, it has merit whatever its price is, the actual level that price is is in reality irrelevant as long as the swings in it are not extreme. That is what the market does and is doing now, it is discovering its price and volatility, which ironically would tend to decrease as price goes up barring outright failure (for whatever reason, various of which are equally apolicable to other currency) or intervention. A thousand dollar swing over ten thousand value is much more extreme than over a hundred thousand value. It is not that he is wrong either, some influences on currency value are much more subtle than any learned model, and some are false or misguided as well. Even he is looking at it like a competition of price worth because his comment is in reaction to price change, that may not be so, it is as possible people are choosing a lesser value but the price rewards them all the same. It is beyond academic analysis at a certain point, and funnily with his experience of inflation crisis you might think he would see the possible benefit or attraction of a simple, decentralised, low issuance standard ?

Not sure why I'm writing this here, where else and he asked.

caradoc-again
caradoc-again

It is most definitely an unmitigated disaster.

All that potential basic demand gone as workers laid off en masse - poof - adding even more downward pressure on local employment.

The stress will scar deeply across all age groups. Behaviours will change as a consequence. What the hell can be done about it?

No one gets through this without some impact.

By nature I'm not someone that likes to see interventionist policies/government but the time it can take for market forces alone to sort this out will see massive social upheaval, mental health problems, family breakdowns.

If lucky enough to dodge the worst dovwe sit by and spectate or do something? Soendca little more? What?

The super wealthy can only eat one meal at a time, live in one house at a time. Encouraging them to invest to get business funds out fast might help others keep food on their table and a roof over their head. Not so much tax the wealth as force it to go where it can help quickly.

Casual_Observer
Casual_Observer

Well this is the new normal for a few months until the vaccine becomes widely distributed.

caradoc-again
caradoc-again

But what do we do?
Thats the question.

Webej
Webej

Correction: "[un]realistically low"

Realist
Realist

Wow. The US hit 250,000 deaths today.

And it only continues to get worse as the days go by. Here are the numbers of case and deaths for each day so far in November:

Nov 1 Su 71,321:399

Nov 2 M 88,905:522

Nov 3 T 94,463:1199

Nov 4 W 108,352:1200

Nov 5 Th 118,204:1125

Nov 6 F 132,540:1248

Nov 7 Sa 127,894:1035

Nov 8 Su 109,659:544

Nov 9 M 127,316:641

Nov 10 T 135,653:1346

Nov 11 W 142,808:1478

Nov 12 Th 162,226:1189

Nov 13 F 187,896:1416

Nov 14 SA 159,165:1257

Nov 15 Su 146,570:656

Nov 16 M 162,516:728

Nov 17 T 161,645:1658

Nov 18 W 156,294:1805 (so far today)

Realist
Realist

Final count for today:

Nov 18 W 173,632:1956

Going over 2000 deaths per day soon.

Does Trump care? No. He only cares about himself. And in taking vengeance on America for not re-electing him.


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