Friday, August 7, 2020

Despite 6 Million Unemployment Applications, Joblessness Drops 0.9% in July to 10.2 Percent – AJSN Shows Latent Demand for Work Down 1,350,000 To 28.0 Million

 

I was the predictor this time, and fell flat on my face.  Because of new unemployment compensation applications camping out at over one million per week, I thought we would see the seasonally adjusted rate worsen from June’s 11.1% to 13% or 14%.  Not only did it not reach that level, it improved.

Other numbers released in this morning’s Bureau of Labor Statistics Employment Situation Summary got better as well.  Unadjusted unemployment fell 0.7% to 10.5%.  Total nonfarm payroll jobs were up 1.8 million, meaning that along with those six-plus million position losses that sent people virtually or in person to their employment offices, there were about 8 million jobs created or reinstated.  The count of the unemployed lost 1.5 million and is now 16.3 million, with people considering themselves to be on temporary layoff adding up to 1,400,000 less to reach 9.2 million.  Those out for 27 weeks or longer, meaning they lost their jobs long before the pandemic, now number 100,000 more and total 1.5 million.  The employment-population ratio, the best indicator of how common it is for Americans to be working, gained 0.5% to 55.1%, and those working part-time for economic reasons, or keeping less than full-time opportunities while seeking them, dropped from 9.1 million to 8.4 million.  The two statistics on which I have been reporting that did not get better were the labor force participation rate, down 0.1% to 61.4%, and average private nonfarm payroll hourly earnings, up 2 cents to $29.39, not an improvement since increases in this number, way-high since coronavirus started, indicate more lower-level workers unemployed.

The American Job Shortage Number or AJSN, the metric showing how many additional positions could be quickly filled if all knew they would be easy to get, fell over 1.3 million as follows:

The AJSN is now 6.5 million less than when the first month of the pandemic reached the data in mid-April, but is 11,400,000 higher than a year before.  Only 54.7% of it comes from those officially unemployed, meaning that latent demand for work includes 12.6 million positions from those with other statuses, roughly a three-way split between those wanting work but not looking for it for a year or more, those claiming no interest in employment, and all others. 

What is really happening now?  Given the historically elevated counts of those filing for jobless benefits, there is great employment churn.  Apparently it is, or those working are, coming and going at an unusually rapid pace, on the order of five times as much as before Covid-19.  There are almost certainly too many people being allowed to work in the Deep South and Florida, the states now worst at containing the virus.  Beyond that the picture is muddled, especially as lower joblessness is less desirable now than lower infection rates.  Until we see both together, we cannot take credit for any employment improvement.  The turtle went forward again, but is too concerned with getting sick to be happy with that.  

Friday, July 31, 2020

The Unmitigated American Disaster Continues with Another Execrable Week, and a Call for Cutting Vaccine Expectations – When Will We Get Relief?


Another seven days of frightful news.  Here are its headlines and subheads:

“Eighteen states set daily case records in the past week, and 40 have had 14-day increases in cases per capita” – The New York Times, July 26th

“U.S. GDP Fell 9.5 Percent (in the second quarter)” – The New York Times, July 30th

“The U.S. economy’s contraction in the second quarter was the worst on record” – Same

“1.43 million filed new state unemployment claims last week,” for the 19th straight of over a million – Same

“U.S. Surpasses 150,000 Coronavirus Deaths, Far Eclipsing Projections” – The New York Times, another July 30th article

“Baseball’s Dumb Decision” – of a July 29th-published letter written to the Times by Kenneth L. Zimmerman, in which he pointed out that “17 as of this writing” players and coaches on one team alone – the Miami Marlins – had recently tested positive, and said “allowing the Major League Baseball season to be played in the middle of a deadly pandemic is the worst decision the league has made since allowing Roseanne Barr to sing the national anthem 30 years ago.”

“Coronavirus in the U.S: Latest Map and Case Count” – same source, July 30th.  This article’s headline wasn’t scary, but it showed 68,000-plus new cases and 1,400-plus deaths the previous day alone.  The Deep South, including and especially Florida, is doing the worst now.  “New cases are decreasing” in Arizona, South Carolina, Texas, Kansas, Vermont, and the U.S. Virgin Islands, but are “mostly the same” or rising everywhere else. 

And, though a bit older, this chart, where all you need to see is the shape of the curves:



And now, to adjust our expectations, along comes “A Vaccine Reality Check.”  This piece by Sarah Zhang, listed as from July in The Atlantic, told us why, even if one of those arrives as early as it reasonably can, “it certainly will not immediately return life to normal.”  Our central government, lately ineffective even when competent, “will have to allocate doses, perhaps through a patchwork of state and local health departments with no existing infrastructure for vaccinating adults at scale” to those are sure they want it, now only about half of adult Americans.  Zhang projected five months, or December, for “a safe and effective vaccine,” which I presume includes distribution.  In the meantime, “without the measures which have beat back the virus in much of Europe and Asia, there will continue to be more outbreaks, more school closings, more loneliness, more deaths ahead.”  The good news is that “at least six” different versions are in “or about to enter” the third and final phase of human testing, which “will take several more months,” and “the high and rising rates of COVID-19 in the United States do make it easier to test vaccine candidate here.” 

Then, we will get a series of ugly disagreements.  We can sensibly agree that healthcare workers should get the first vaccinations, but who after that?  People in states with highest infection rates, rewarding them for their less prudent behavior?  Those in the Northeast as appreciation for their good conduct, who need it immediately the least?  Blacks, because their lives Matter, even if that would be obvious bigotry?  Those whose local governments are most prepared to distribute it, punishing those not as lucky?  I could easily see the first virus distribution ready for, say, December 1st, but a month or two of legal motions making us all wait and all lose.  Accordingly, while we appear to be on the path to recovery, and a vaccine still seems our only chance to start that within the next year, we still have many steps to walk before then. 

What will happen?  I forecast a vaccine ready by year’s end, with dissemination, while muddled, piecemeal, divisive, resource-constrained, and court-hobbled, to be 95% completed by the end of March.  That is eight months from now, so we must maintain patience.  Then we can work out what life will be like in America after that.  Much more on that huge issue will follow in this space in the weeks and months to come. 

Friday, July 24, 2020

Coronavirus and Jobs: More Bad American Weekly News, But…

The beat goes on…

The United States has a new peer group of countries, which is Colombia, Bolivia, Brazil, South Africa, Kyrgyzstan, and Oman.  They were the only others with a rate of over 14 new Covid-19 infections last week per 100,000 population.  Here is the map as it appeared in the Thursday New York Times:


The Bahamas, in the face of a 50% case increase blamed on American tourists not wearing masks or practicing social distancing, rolled back their willingness to allow them.

The major league baseball mini-season started yesterday, and I give them an even chance of completing all 60 pre-playoff games. 

We achieved our 18th straight week of over 1 million unemployment claims, with 1.4 million.
Moving on from there to our national financial and trade situation, we have Ben Casselman and Jim Tankersley’s “How to Save a Half-Open Economy” in the July 17th New York Times.  We’ve heard plenty from those two over the years, and what they published here was a cut clearer and more thoughtful than most other pieces on this subject.  They recommended five general things.

The first, “prioritize public health,” included “the economy cannot recover until the virus is in check,” obvious to half the population, and matched my recent observation that if we try to bring back businesses prematurely, we will get neither economic nor pandemic success.  The authors meant making public health the top priority.  Taking short-term pain here has always been better than prolonging it, and for examples we need look only at the seven northeasternmost states. 

Second, “extend unemployment benefits.”  As Casselman and Tankersley pointed out, such payments “are serving three purposes” by keeping people away from workplaces to serve their first recommendation, allowing them to stay afloat, and helping the economy by providing money likely to be spent and circulate.  We may not need to maintain $600 per week, with $400 possibly nearly as effective, but with OSHA nowhere in sight it is blithe to suggest that people be encouraged to go back to jobs with doubtful or worse safety.

Third, “spend what it takes to reopen schools safely.”  Well, four out of five ain’t bad.  I still think that, advantages acknowledged, we have no business opening in-person elementary and middle schools this fall, if only because children cannot be expected to be disciplined about following social distancing, Plexiglas shields notwithstanding.  (I assure you that my third-grade self would not have behaved himself any more with that than he did with less life-preserving rules, which wasn’t much.)  We would do better to defer to the authors’ first rule above.

Fourth, “keep businesses alive.”  Casselman and Tankersley put into print something that hasn’t been there enough, that it is the small enterprises, not large corporate ones with more money and more borrowing power, which need our help now.  The owners may be sustained with other programs, but their ventures may otherwise be erased, as their rents or mortgages and additional expenses simply cannot be made without a full number of customers.  As well, as economist David Wilcox put it, paraphrased by the authors, “the government has effectively forced business owners to take a hit… so it should help them survive.” 

Fifth, “provide some certainty.”  That would call for congressional planning and interparty cooperation, in letting people and small firms know what they can expect for a year or more, without looming questions such as this week’s about whether federal jobless payments will continue. 

That brings us to the good side of this week’s events.  Although we are lacking any formal announcement, except for China saying they expected one to be available by year’s end, news media scuttlebutt has it that we are getting close to having a vaccine developed.  Trials in three different Western labs have apparently gone very well, and articles have mentioned the need for sufficient funding and glass containers.  Based on the admittedly vague things I have seen, I call us a favorite to have widespread vaccine implementation by the end of the first quarter.  In the scheme of things, that will arrive before we know it.  Then we will be rescued.  If that fails to materialize, we can take heart about another probable pandemic-easing outcome – per sportsbook.ag, Donald Trump is now a 29 to 20 reelection underdog. 

Yes, likely something good will happen.  In the meantime, you know the drill – wear a mask and stay six feet away from others.

Friday, July 17, 2020

The United States in 2020: Another Week Heading Down the Swirly-Swirly


Not a lot to like this time.  As with the old dictum that people who give up freedom for security deserve neither, Americans have tried to trade public health for improving the economy and failed miserably at both.

We now have a situation where relatively low unemployment is an indication of irresponsibility, as many states with that have a lot of people who should be avoiding infections instead of working.  That’s one takeaway from “The Fed Sets Out Many Reasons to Worry About the Economy,” by Jeanna Smialek in the July 1st New York Times.  Also “there is a serious chance of a double-dip downturn that could permanently scar the American labor force,” and Federal Reserve gathering participants “saw “substantial likelihood” of additional waves of virus outbreaks with the potential to cause a drawn-out period of economic weakness.”  This article was written before the large infection jumps in Florida and the Southwest.

Echoing and addressing a question often heard last week was Derek Thompson’s “COVID-19 Cases Are Rising, So Why Are Deaths Flatlining?,” in the July Atlantic.  He offered five possible reasons, the first and most important being that “deaths lag cases.”  After that, “expanded testing is finding more cases, milder cases, and earlier cases,” “the typical COVID-19 patient is getting younger,” “hospitalized patients are dying less frequently,” and “summer might be helping.”  Since then, per “As U.S. Coronavirus Cases Hit 3.5 Million, Officials Scramble to Add Restrictions” (July 16th, New York Times), the 14-day change in number of new instances, 67,190 identified on July 15th alone, is up 44% while the count of deaths, 958 that same day, has gained 51%.

“It’s 2022.  What Does Life Look Like?”  That titled an article by David Leonhardt in the July 10th Times.  He and others are getting a bit frisky about assuming what changes will and won’t become permanent, but he tempered it by saying “The financial crisis of 2007-9 didn’t cause Americans to sour on stocks, and it didn’t lead to an overhaul of Wall Street.  The election of the first Black president didn’t usher in an era of racial conciliation.  The 9/11 attacks didn’t make Americans unwilling to fly.  The Vietnam War didn’t bring an end to extended foreign wars without a clear mission.”  I add that even when this thing is below 100 new daily American cases, we won’t be having all our business meetings on Zoom, wearing masks everywhere, eschewing handshakes, or avoiding bars.  But for now, Leonhardt quoted Warren Buffett saying “it’s only when the tide goes out that you learn who’s been swimming naked,” and applies that to not only weak individual companies being culled out but to nearly entire industries, such as malls, department stores, and small colleges, that have gone from being in big trouble to becoming completely unviable.  “Politics will shape the economy,” depending vastly on who wins November 3rd, and “if there is a single lesson of the current era of American politics, it’s that change can happen more quickly than we imagined.”  With the suddenly resurging Black Lives Matter movement, two incidences of stunning idea and opinion suppressing in a publication cited above and below, and renewed talk about (of all things) climate change, we can’t disagree.

The real American exceptionalism again took center stage in “In Some Countries, Normal Life is Back.  Not Here” (Michelle Goldberg, The New York Times, July 13th).  Several posts ago I compared the “marshmallow test,” where children are offered a choice between one of those now or two some minutes away, to pandemic responses, and here is clear confirmation of which too many Americans  have chosen.  Elsewhere, “Taiwan, where most days this month no new cases have been reported, just held the Taipei Film Festival, and a recent baseball game drew 10,000 spectators,” and “there were 321 new cases in all of Canada last Friday,” similar to the current number in Italy, “once the epicenter of Europe’s outbreak.”  Shockingly enough, in the Global Health Security Index 2019 report, America was rated most prepared.  It seems hardly surprising that “there’s no drumbeat of calls for the president’s resignation,” but even when you don’t factor in reactions to the Minneapolis police chief, “that’s how you know the country was broken before coronavirus ever arrived.”
 
We also see that, starting with Los Angeles and San Diego’s, not all public schools will open this fall.  We achieved a 17th straight week with 1.3 million new unemployment claims.  And, if all of that isn’t bad enough, “The Pandemic Could Get Much, Much Worse.  We Must Act Now” (John M. Barry, again The New York Times, July 14th).  Would that we had the will to do things like Australia, which “just issued fines totaling $18,000 because too many people attended a birthday party in someone’s home,” but instead we have “the highest growth rate of new cases in the world, ahead even of Brazil,” including one state with one-quarter of Germany’s population achieving “over 15,300” of those, or, per capita, over 150 times as many.  However, if “Nynex” (New York and the six New England states) were a country, it would fit in well with Europe’s pandemic outcomes, so we may get more and more internal travel restrictions.

What does all this mean for United States Covid-19 prospects?  When you also consider the intractability of some of our citizenry, we will, as a nation, stay reduced to waiting for a vaccine.  That could be widely available in the first quarter of 2021, or it could never materialize.  Could we break up into several de facto countries if it doesn’t?  Don’t bet against it.  And in the meantime, wear that mask and stay six feet apart - at least, then, YOU can survive.

Friday, July 10, 2020

American Impatience, and Its Antidotes


What is the United States doing now?

Four months after first acting, having more new Covid-19 cases than ever – up to 62,751 on Wednesday, including 9,979 in one state (Texas).

Getting over 1 million, about 5 times the usual amount of, new unemployment applications every week – the 16th straight being 1.3 million ending Saturday.

Once again, running short of protective supplies and hospital beds.

Precipitating columns from moderate commentators such as David Brooks, who two weeks ago wrote “that we are losing the fight against Covid-19,” as “our behavior doesn’t have anything to do with the reality around us,” and “we just got tired so we’re giving up.”

Staying divided into two main camps, each with its own sacred cows, which both push their own priorities over public health.

Arguing about whether to open public schools this fall, which, if either part of the vague and poorly substantiated notion that children neither get infected nor spread it turns out to be wrong, could create over 100,000 first-rate virus incubators spread throughout the land. 

Distorting the simple acts of wearing masks and staying six feet away from others into affronts on freedom and even indications of a huge, impossibly well-hidden conspiracy from people who cannot even deliver mail consistently.

Getting the worst of both worlds of cutting coronavirus infections and healing its economy, succeeding only in doing neither.

Suffering through wildly irresponsible central leadership.

Disgracing itself – if not going down the drain altogether.


What can we do about all of this?

Wear that mask – for others, not yourself – and keep your distance.

Read and keep the following chart, and make your own judgments about what is worth risking and what is not:





Read something about civilized, blameless people having much more hardship than needing to stay home more and putting large gatherings on hold.  Anne Frank’s Diary of a Young Girl is a good place to start, along with other accounts of World War II with its rationing that went on long afterwards, loved ones away and in mortal danger, indefinitely conscripted soldiers, and other things much worse than what we have now.  Also read Ecclesiastes 3:1-8, “A Time for Everything,” even if you are not Christian.

Take care of yourself physically and mentally.  Use extra time and any obligation reduction to help your own situation, and prepare for your future, in any way you can.  Find things to enjoy as well.

Remember that coronavirus vaccine research is, as far as we can tell, going superbly.  We may need that to bail us out in this country, and we may get it – just not today or tomorrow.

Take heart that there are American places that have done as well as elsewhere.  My county, Sullivan in New York (75,000 population), has gone from over 500 active Covid-19 cases to nine, with nobody hospitalized.  It is no coincidence that I almost never see people here maskless or encroaching on others.

Vote on November 3rd, for the presidential candidate you think can best get us back on track.  Vote even, and especially, if you sat out in 2016.

Keep your spirits up!  This too will pass.  And as Vera Lynn, who died last month at 103 sang:
“We'll meet again
Don't know where
Don't know when
But I know we'll meet again some sunny day.”


Thursday, July 2, 2020

On the Road to Recovery: Employment Data Improves, Including AJSN, Showing Latent Demand for Jobs, 5 Million Lower Than 2 Months Ago



After last time, I didn’t even try to guess what this morning’s Employment Situation Summary would say, and not many others seemed to either.  The only projection I saw was for a gain of 2.4 million jobs.

That turned out to be only half of what we got.  Total nonfarm employment increased 4.8 million from May, with seasonally adjusted joblessness down from 13.3% to 11.1%.  The latest data showed 17.8 million unemployed, down 3.2 million, with those out for 27 weeks or longer up 200,000 to 1.4 million.  The two measures of how common it is for people to have jobs or be officially unemployed, the labor force participation rate and the employment-population ratio, both improved, with the former going from 60.8% to 61.5% and the latter up from 52.8% to 54.6%.  Those working part-time for economic reasons, or wanting a full-time position while holding on to something shorter, counted 9.1 million, bettered from 10.7 million.  Average hourly private nonfarm payroll earnings fell 38 cents, reflecting people with lower pay returning to work, and is now at $29.37. 

A measure I have not previously mentioned, those on temporary layoff, has gone from 18.1 million in April and 15.4 million in May to 10.6 million last month.  That is because fewer people considered themselves off only short-term, along with others returning to work. 

The American Job Shortage Number or AJSN, the measure showing how many more positions could be quickly filled if all knew they would be easy to get, dropped 2.9 million this month, as follows:







The AJSN has greatly improved since April’s 34.3 million, but is still almost 13 million higher than a year ago.  Almost all of the difference since May is from lower official unemployment and a smaller count of those wanting work but not looking for it for a year or more, although those claiming no interest in work counted almost 2 million fewer.  That means jobs are getting more available in at least some areas.

Although there is still a lot of confusion about temporary versus permanent layoffs, and the BLS household survey response rate dropped again to 65%, the American employment situation is clearly improving.  That is hardly confusable with “good,” but we are on the way back – at least we were, before our new coronavirus case tally went up late last month.  The turtle, though far behind his pre-April position, took a healthy step in the right direction. 

Friday, June 26, 2020

A Terrible Covid-19 Week, with Projections to Match


Though at least this past Friday, it had seemed the United States was on the way to getting out of the coronavirus pandemic.  Now it doesn’t look that way at all.  I’m not basing that on a bad outcome, on one or two pessimistic predictions, or even on general disappointment about jobs, the economy, or our progress in daily life.  Here I have eight different articles with varying things worth worrying about.

Whether we label it a second wave or not, the word, over three months after the Covid-19 turned the nation upside down, that “U.S. Sets Record for Daily New Cases as Virus Surges in South and West” (The New York Times, June 25th) is seriously bad news.  Although states in the Northeast are far below their infection peaks, those in the South and West, especially Florida, Texas, Oklahoma, Arizona, and South Carolina, are doing the worst.  As a result, New York, New Jersey, and Connecticut, the first two the most dangerous American places in March, are, in an indication of deficient federal action, requiring that Americans arriving from states with the highest rates quarantine themselves for 14 days.

On the economic front, we have settled in to a typical 1.5 million state unemployment claims per week, putting the lie to any idea that all job movement is now people returning to work.  Ben Casselman and Tiffany Hsu’s “Continued Layoffs Signal an ‘Economic Scarring’,” from the June 18th New York Times, documented that we had 13 consecutive weeks with at least one million filings, up to 14 with The Washington Post’s June 25th Economy Alert that “another 1.48 million people filed for jobless claims last week.”  Amazingly, there had not been more than a weekly 695,000 for the previous 37 years.  As well, “Millions of Job Losses Are at Risk of Becoming Permanent,” per Olivia Rockeman and Jill Ward on June 14th in Yahoo Finance.  That is because efficiency, the largest reason for the number of jobs to decrease long-term after automation and globalization, has jumped with companies’ discoveries that they can run remarkably well without workers laid off or furloughed.  In March, almost all employees losing their income expected that, after the pandemic, they would be back on the job, but now we and they strongly suspect otherwise.  It is true that many people are resuming their pre-coronavirus employment, but, overall, we are still in serious trouble.

Over the past four weeks there were three broader looks at how we are doing with Covid-19, and all were negative.  Yascha Mounk’s The Atlantic “The Virus Will Win,” subtitled “Americans are pretending that the pandemic is over.  It certainly is not” almost forecast attitude changes since then manifested in this past Wednesday’s 700-point Dow Jones drop.  Since per one poll, the share of Republicans trusting “the information you hear about coronavirus from medical experts” went from “nearly nine out of 10” to “just about one in three” in two months, “it is now difficult to imagine that anybody could muster the political will to impose a full-scale lockdown for a second time,” especially in the states listed above, all of which Donald Trump won in 2016.  Similar sentiments were expressed by Michelle Goldberg in the June 22nd Times “America is Too Broken to Fight the Coronavirus,” along with “Republican political dysfunction” making “a coherent campaign to fight the pandemic impossible,” and the statistic that after “slowly declining,” “the number of new cases” are “up a terrifying 22 percent over the past 14 days.” 

More ambitious in scope if not longer is Annie Lowrey’s June 23rd Atlantic “The Second Great Depression.”  She projected a recovery, instead of looking on a graph like a V or a U, resembling “a kind of flaccid check mark, its long tail sagging torpid into the future.”  Given the steady and way-high unemployment claim numbers that may be most realistic, also with the Congressional Budget Office not only projecting an $8 trillion next-decade economic activity cut but expecting consumer spending to drop “$300 billion to $370 billion” each quarter through 2021 year-end.  Now, per Lowrey, “economists expect that 42 percent of people recently let go will not return to their former employers,” and, with lower tax revenues, we will have “a budget crisis for state and local governments.”  She also pointed out that “never getting the pandemic under control means never unleashing the economy.”

The good news is that Trump is, for the first time in years, a substantial reelection underdog.  I say that not because of poll results, but from sportsbook.ag, an offshore betting facility located where it is legal to wager on elections, which, as of yesterday morning, had the Democratic candidate, presumably Joe Biden, as slightly better than a 3 to 2 favorite.  This company cannot afford to be biased, as bettors would exploit that, so its lines are the most realistic actual probabilities.  Yet it is still more than four months until November 3rd, and a lot more can and will happen. 

Otherwise, we should root for a vaccine to be available by Christmas or sooner.  But until then, we need to keep evaluating our choices – and to keep our expectations in line.