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, 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.

Friday, June 19, 2020

The May Jobs Report, Revisited, Will Stand

The most recent Bureau of Labor Statistics Employment Situation Summary was as controversial as any I have seen.  It showed a solid improvement, including 2.5 million more jobs and an unemployment rate cut to 13.3%, although analysts had forecasted 19.8% and a 7 million loss instead.  I didn’t believe it, calling these outcomes “severely in error,” citing the report as saying “BLS and the Census Bureau are investigating why this misclassification error continues to occur and are taking additional steps to address this issue,” and mentioning the possibility of deliberate distortion.  On its release date and soon afterwards, many commentators, from economist Paul Krugman to former Vermont governor Howard Dean, voiced similar concerns. 

Since then, though, a flurry of articles, all in the New York Times, have defended these results.  Ben Casselman, in his June 8th “No, the Jobs Report Wasn’t Rigged.  Here’s What Happened,” called it “all but impossible to manipulate the jobs numbers undetected,” and said that, classification problems notwithstanding, joblessness still dropped in May.  The muddle, per Casselman, came from people describing themselves as ““employed but absent from work” – a category meant to reflect vacation, family leave or other temporary absences.”  Clearly, many people invoked this label expecting to automatically return to their labor once the pandemic abated or ended; while most will be, all the talk about the coronavirus causing permanent workplace changes suggests a large number of others will not return.  And the question remains:  Just how bad was the American jobs situation in mid-May?

Two others were released not only in the same place but on the same date.  “About Those Jobs Numbers…” from the Dealbook Newsletter, said “the job growth reflected mostly laid-off or furloughed workers returning to their jobs,” and that, per Neil Irwin of the Times, we are seeing an “epic collapse in demand.”  Krugman asked “Will the Jobs Report Destroy Jobs?” by impeding further “emergency aid” in part responsible for recent economic improvements, and projected that “there will soon be many more layoffs unless aid comes soon.”  “Don’t Cheer Too Soon.  Keep an Eye on the Core Jobless Rate,” on June 15th by Jed Kolko, just added to the murkiness, but, echoing Krugman, said that May’s output “could give false hope, and lead to complacency about the labor market from public officials.”  

Overall, what can we keep and reject from these updates?  Per Casselman, a previous BLS chief said that group is “extremely reluctant to make any changes, in part because doing so would invite charges that the agency was massaging the numbers for political or other reasons.”  Indeed we can’t have that, even if the data we did get was poor.  Expect no corrections from me or anyone else.  But we don’t, either, need to jump to the conclusion that the economic side of the crisis will soon be over.  June’s data, which is now being collected, will tell us more, and we can go from there, as well as we can.

Friday, June 12, 2020

The Coronavirus: Must We Lose, Give Up on It, or Fail the Marshmallow Test?

United States response to the COVID-19 pandemic is now solidly in a new phase.  We’re past the time when mandated closings dictated what we could or could not do, and are moving on into “reopening.”  With that, there has been a flurry of views suggesting we, collectively, are not doing so well. 

When Paul Krugman said “America Fails the Marshmallow Test” in the June 9th New York Times, he referred to “a famous psychological experiment that tests children’s willingness to delay gratification” by offering them one marshmallow now or two in 15 minutes.  While “other advanced countries, even hard-hit nations like Italy and Spain” now have sharply reduced new infection rates, “it now looks likely that by late summer we’ll be the only major wealthy nation where large numbers of people are still dying” from the virus.  He named South Korea, one of the most prosperous and densely packed countries in the world, and New Zealand, elsewhere in the news for now having zero cases, as achieving great success by not only getting the most from social distancing but by implementing “a regime of testing, tracing and isolating, quickly identifying any new outbreak, finding everyone exposed and quarantining them until the danger is past.”  He blamed us being “too disunited, with too many people in the grip of ideology and partisanship.”  Americans, judge thyselves.

Avoiding the latter, columnist Ross Douthat, in the June 7th edition of that same publication, came out with “Why the Coronavirus Is Winning.”  He quoted a computer science doctoral student (of all people) reminding us that all the organism “wants is targets,” is totally unaware of and unresponsive to “the elaborate social nuances humans have carved out through patterns of communication, representation and discourse,” and in the process “has exposed how much of Western society… is permeated with influential people who have deluded themselves into thinking that their ability to manipulate words, images and sounds gives them the ability to control reality itself.”  Douthat tracked resistance to avoiding coronavirus exposure as starting from Republicans, “who embraced the idea that economic carnage was just the result of misguided government policy,” despite crashing demand being roughly concurrent with legal restrictions, and, after George Floyd’s death, moving “to the public health establishment, many of whose leaders are tying themselves in ideological knots arguing that it is not only acceptable but essential, after months circumscribing every sort of basic liberty, to encourage mass gatherings to support one particular just cause.”  With those most responsible for objective public policy now infected, so to speak, Douthat proclaimed that “there will be no further comprehensive attempt to fight the virus.”  At the least, we must prepare for that possibility.

Observing the same variable standard began “America is Giving Up on the Pandemic,” by Alexis C. Madrigal and Robinson Meyer in The Atlantic on June 7th.  They say “Americans may wish the virus to be gone, but it is not,” as, outside the Northeast, “cases have only plateaued,” and “there’s no point in denying the obvious:  Standing in a crowd for long periods raises the risk of increased transmission of SARS-CoV-2,” with head epidemiologist Anthony Fauci calling these protests and subsequent police actions “a perfect set-up” for virus proliferation.  As well, United States residents “never stayed at home to the degree that most Europeans have.”  Overall, per Madrigal and Meyer, “the problems with our response to the pandemic reflect the problems of the country itself” – I add that they also illuminate cultural differences, specifically our higher independence and risk-taking, the same things that assure that our life expectancy will not match the likes of those in Japan or Norway.

Overall, our chance of getting or giving the coronavirus is now, more than ever, a function of our individual choices.  A great-seeming article idea, which precipitated “When 511 Epidemiologists Expect to Fly, Hug and Do 18 Other Everyday Activities Again” by Margot Sanger-Katz, Claire Cain Miller and Quoctrung Bui in the June 8th New York Times, was neutralized by respondents’ overriding view that it would depend on availability of “an effective vaccine or treatment,” but still provided worthwhile information.  Activities least likely for quick epidemiologist resumption were “sporting events, concerts and plays,” with most expecting to pass them up for more than a year.  “Weddings and funerals,” “airplanes,” and “visiting the elderly” were the most mixed and controversial.  But our own preferences and situations must dictate.  For me, I expect to fly within the year, but think my Chewbacca hairstyle is a small price to pay for avoiding close contact with someone who has had that with many others.  Group protest marches are out, but I can walk for exercise without a mask all I want, as here I rarely get within 20 feet of other pedestrians let alone 6.  As carryout is fine, I don’t want to eat at even a virus-modified restaurant.  You need to think about your own choices, as this thing isn’t ending soon and the law won’t protect you anymore.  Just don’t catch yourself settling for one marshmallow now instead of two soon, as the answer to the title question is “no.”

Friday, June 5, 2020

Totally Unexpected May Jobs Report Leaves Unemployment Lower and Jobs Added – AJSN Shows Latent Demand at 32.1 Million, Another Improvement

When the paragraph introducing this morning’s Employment Situation Summary popped up at its usual 8:30 on the Bureau of Labor Statistics site, I thought I was reading the wrong thing.  Here we were, expecting something like the published projections of 7 million more jobs gone and 19.8% unemployment, and both actually improved.

Per the document, we gained 2.5 million net new nonfarm positions, compared with April’s 20.5 million loss, and seasonally adjusted joblessness is down 1.4% to 13.3%.  Most other numbers followed the modest but significant improvement, with the labor force participation rate up 0.6% to 60.8% and the employment-population ratio rising 1.5% to 52.8%.  The count of people working part-time for economic reasons, or holding on to less than full-time work while seeking that, shed 300,000 to 10.6 million, and average private payroll nonfarm hourly wages fell 26 cents, no doubt due to more low-paying jobs being actually or allegedly reinstated, to $29.75.  The number of those unemployed for 27 weeks or longer, almost irrelevant to the current situation, gained almost 300,000 to return to March’s 1.2 million.  Unadjusted joblessness matched the adjusted version by losing 1.4% and came in at 13.0%.

The American Job Shortage Number or AJSN, the metric showing how many currently unavailable positions could be quickly filled if all knew they were out there, lost 2.2 million from April’s all-time record, as follows:

All but 400,000 of this upturn is from lower official unemployment, with almost all the rest from fewer people wanting to work but not looking for it for a year or more.  Compared with May 2019, the AJSN has gained 16.5 million, most from huge increases in these same two categories.

What happened?  The notes with the BLS numbers gave several possible reasons:  replacement of surveying at their regional data collection centers with more phone use, a 67% household survey response rate down from about 82% before coronavirus’s effect, and a possibility of confusion from workers still technically employed but “absent from their jobs” along with classification mistakes on people with other gray-area work statuses.  It seems certain that if complete lack of pay would make workers on payrolls officially unemployed, the rate would be far higher, and might indeed be roughly 20%.  As a result, “BLS and the Census Bureau are investigating why this misclassification error continues to occur and are taking additional steps to address this issue.”  We can only hope this is not a political scandal.

Accordingly, this data is not only obsolete, as was the case for the last two versions, but severely in error.  There is a good chance the BLS will issue a correction or at least a corrective estimate, and reopenings may have made 13.3% a reasonable estimate for today, but in the meantime, the turtle went backward, not forward.

Friday, May 29, 2020

Around the Coronavirus Horn, Murkily

We’re going through odds and ends this week.  Here we are, with interpretations to favor the pro-Trump and anti-Trump sides.  I’m not calling them Democratic or Republican since the real values of both parties are in flux, and certainly not liberal or conservative since our president is not a conservative:

First, in response to Mike Bebernes in the May 26th Yahoo News, “Is the $600 unemployment bonus helping or hurting?,” the rough answer is clear:  It’s helping.  It may be too high in many cases, but as I have written more there is nothing more economically stimulative than jobless pay, as it goes to people very likely to spend it.  As for any idea that they should be encouraged to work by being denied it, that’s straight out of A Christmas Carol, when almost all of the currently readily available jobs for which those who lost low-end ones are qualified potentially expose them to Covid-19.  We are the farthest we have been in many decades from consistent workplace safety – where is OSHA these days? – and nobody should be required to make that choice.

Second, there is nothing wrong with a president’s son crowing about a big stock market gain on the same day our cumulative virus deaths reached 100,000.  Many other things happened then, and we should be complimenting ourselves for doing social distancing so well that this total, as many people in early March openly feared, was not in the millions.  I don’t want to be reminded of the “AIDS quilt” made with a square for everyone who had ever died from that, when a similar “cancer quilt” might have been the size of Rhode Island.  There is also nothing immoral about businesses choosing to reopen – or to stay closed.

Third, “World economic prospects darken, rebound delayed:  Reuters poll” (Shrutee Sarkar, Reuters, May 26th) seems behind the curve – but were many people really expecting a fast recovery?  Jobs have gone away not only from pandemic precautions, but from the loss of unemployed people as customers.  Reuters-poll projected 2020 world economy shrinkages have gone from 1.2% on April 3rd to 2.0% on April 26th and this week 3.2%.  The last one still seems low to me; despite the number of deaths being lower than expected, I expect it will be about 5%.  Rapid normalization is not promising, as it was also announced this week that Sweden, of the “herd immunity” strategy, now tops the planet’s nations in per-capita fatalities. 

Fourth, I don’t think our current situation will kill off ride providing or room sharing, but it is giving de facto hotel and taxi businesses another severe blow, as shown in “California Sues Uber and Lyft, Claiming Workers are Misclassified,” by Kate Conger in the May 5th New York Times.  As before, once these two and Airbnb are legally obligated to the same rules as their established equivalents, including being unable to call obvious employees “contractors” with few rights, they will almost go away.  There will be niches in which they can survive, but eventually common sense in regulation will cut them vastly back.

Fifth, how about those maps showing total coronavirus cases by state giving us per-capita instead?  That would help when, as should be happening soon, we get good data on month-before decisions to reopen.  Ten days after them, as in “Georgia Went First.  And It Screwed Up,” by Keren Landman in the April 30th New York Times, is too soon for assessment, but in the next few weeks, we will know a lot, and it would be good to see that graphically and clearly.

Sixth, in a few eventful months the Times Editorial Board has gone from cellular phone surveillance being a huge national threat, worthy of a whole special section, to the devices being “particularly useful at this moment, when it’s crucial to know where infected people have been, and whom they’ve been close to.”  The same source, May 1st’s “We the People, in Order to Defeat the Coronavirus,” even seemed to laud “several countries around the world, as well as some American states,” for starting “apps that either encourage or require their citizens to check in regularly and report their locations.”  Whew!  These problems could challenge master philosophers, so how will we common folk resolve them?  And some wonder why democracy has so often been called a great experiment. 

Seventh, is it truly necessary that spectator sports resume this year?

Eighth, if the Democrats think they are on a path to win back the White House this fall, they are mistaken –, an offshore casino where it is legal to bet on elections, has Trump as a 5 to 4 favorite.

Keep safe – next week we’ll see just how bad American unemployment has officially become. 

Friday, May 22, 2020

Coronavirus This Week: Where We Are Now, Going, and Not Going

We have had a lot of recent news about reopening pieces of American life.  Per last week’s post, we have shifted from waiting for a vaccine, which could take anywhere from several months to several years, to relying on the social distancing we have learned and generally done well with to keep us safe in additional situations.

Per the May 19th New York Times, “All 50 States Have Eased Coronavirus Restrictions.” Places like Connecticut and Pennsylvania, previously with bans on people leaving their homes for anything nonessential, are in the process of lifting those and at least matching policies here in New York state, where, for example, general driving has been allowed.  On the other side, Alaska is, effective today, returning to total pre-virus openness. 

The important thing to realize here is that freedom to conduct business does not mean the economy returning to February’s levels.  Between people broke from losing their jobs, those pulling back financially in preparation for possible problems, and those of us not wanting to risk our health for things as small as haircuts, most in-person businesses can expect only about 25% of their previous sales.  Confidence, through drastic reductions (not just leveling off) of new-infection rates, will we hope improve with time, but no legislation, short of spending not only trillions but tens of trillions of dollars on personal subsidies instead of large-corporation bailouts (with the low cost of money, large firms should be borrowing instead), will turn the clock back.  With intense politicization of the pandemic and poor federal guidance, people will be trusting their own judgment, which, with stores in small Idaho towns generally less crowded and therefore safer than those in Philadelphia or Cleveland, is appropriate.

One area getting especially large press has been what colleges will do in the fall.  Previously I wrote on a piece remarkably reckless for an Ivy League president, and an unstated rebuttal, “Colleges Are Deluding Themselves,” came out in the May Atlantic.  Its author Michael J. Sorrell, president of tiny Paul Quinn College, made all of the right points:  the background that “American higher education was in crisis long before the coronavirus”; the need for, and Sorrell’s experience at, universities adapting forcefully to changing times; a research discovery that “physical classes alone put almost all students on campus in close proximity to one another,” with “replacing the largest lecture courses with online classes… not enough to reduce the risk”; and clear statements that “if a school’s cost-benefit analysis leads to a conclusion that included the term acceptable number of casualties (italics his), it is time for a new model” and “for college students… sacrifices will include long periods of remote learning.”  I think  efforts to have normal campus life this fall are doomed to tragic, spectacular failure, and, as I wrote before, we have more critical national problems than requiring that people mostly around age 20 choose between taking a gap year or making do with online courses.

Elsewhere, we may need to “Hunker down:  Some states say no full-scale reopening until coronavirus vaccine, treatment is ready” (Tyler Olson, Fox News, May 19th).  As reasonable as Alaska’s choice in context are statements from governors and mayors of New Jersey, Michigan, Los Angeles, Illinois, and Oklahoma City, that for example, per New Jersey governor Phil Murphy, “until either a proven vaccine is in our midst or proven therapeutics are widely available, we cannot firmly enter the new normal, which eventually awaits us when life will once again return to all of our workplaces, downtowns and main streets… and if we begin to see a backslide in public health, we will have to also pull back on the reins of our restart.”  And per “What to Expect When a Coronavirus Vaccine Finally Arrives,” in the May 20th New York Times, it may take a while.  The polio virus was stopped by the 1950s Salk and Sabin vaccines after, of three similar attempts, “two proved ineffective, another deadly,” and the Salk vaccine itself had “flawed batches” which “caused more than 200 polio cases and 11 deaths.”  

So, let’s cheer the work being done here, but not hold our breaths.  Likewise, we’ll hope the reopenings, which seem generally sober and measured, work without a second Covid-19 explosion.  But we will need to be patient.  As the new saying goes, six feet apart is better than six feet under.