Friday, February 19, 2021

Jobs and the Economy in February: What’s Happening?

If you look at the Covid-19 statistics, this has been a fine month.  Per the February 18th, the graph of new daily cases has been zooming down like a black-diamond ski slope, with the 7-day average down from 259,571 on its January 8th crest to 146,491 on February 1st to 77,665 two days ago.  The same measure of virus-caused deaths has fallen from 3,352 on January 12th to 3,160 and 2,026 on February 1st and 17th respectively.  The seven-day hospitalization averages also peaked on January 12th, with 131,127, and on the 1st and 17th reached 101,117 and 67,916.  One but not the only contributor of our improvement, vaccinations, have now reached 12% of Americans with one dose and 4.7% fully treated, and, per the title of Tamar Lapin and Ebony Boden’s February 16th New York Post piece, “Biden: COVID-19 vaccine will be ‘available’ to every American by end of July.”  So we now have measures of our progress and at least a tentative timeline.    

Employment is not doing as well.  However, if it was, we might wonder how many people were working unsafely, so the data and commentary here, while well worthwhile, are not now our primary concern.  Given that, though, what do six articles from earlier this month say about it?

As Jim Tankersley put it in the February 1st New York Times, “U.S. Economy Is Healing, but Budget Office Says Workers Have a Long Way to Go.”  Tankersley wrote that the Congressional Budget Office had projected that “the economy will return to its pre-pandemic size by the middle of this year, even if Congress does not approve any more federal money to aid the recovery.”  With Joe Biden’s assessment, that may be a few months optimistic, especially if “it will be years before everyone thrown off the job by the coronavirus is able to return to work,” which seems overly gloomy.  The CBO anticipated 3.7% overall economic growth for 2021, reasonable, but estimates here about full employment not resuming until late this decade are premature.

More pessimistic was Neil Irwin in The New York Times on February 5th, that “The Jobs Crisis Is Broader Than It Seemed.”  I don’t know – some of us thought it was plenty broad.  Irwin documented eleven-month net losses in construction (down 256,000), retail (off 383,000), manufacturing (582,000), business and professional services (825,000 – so much for cubicle workers being safe), education and health (down 1.3 million), and state and local government (the same), as well as leisure and hospitality (minus 3.9 million, and down the past two months).  Some of these positions will simply need to wait until vaccinations reach high levels, and, if few workers in them die, that would be fine.

Another view came from Paul Davidson in the February 11th USA Today: “More temps, more hours:  Signs of an improving economy emerge despite pullback in hiring.”  With the timetable even vaguer eight days ago, many businesses were filling growing needs with temporary workers and giving extra hours to existing ones.  Hiring permanent employees has often been hard, especially for coronavirus-dangerous positions such as the hotel work Davidson cited, and some unemployment benefits now paying more than the jobs they covered has also made it easier for prospective employees to stay out.  All can at least hope for strong business by the end of this year, though, as, per Wells Fargo in this article, “Americans have saved about $1.5 trillion during the crisis.”  Then, it seems safe to predict, companies will hire more permanent workers, and will need them enough to pay what they must to bring them in.

Not all of the unemployed are doing so well, at least according to the New York Times Editorial Board, also on February 11th, in “Many Jobless Workers Aren’t Getting Help,” in which they contended that “most unemployed workers don’t get anything,” largely since “to hold down costs, many states have created obstacle courses of forms and tests and documentation requirements.”  They also related horror stories of backlogs, such as Georgia’s “180,000 applications,” and people spending hours on hold without satisfaction.  I think states can “find programmers who knew how to write code for (New Jersey’s) 40-year-old systems,” but there is no real excuse for those backups.  Hire people to do the work and end the jam.

One ongoing problem is now easing, as, per Nelson D. Schwartz also in the February 11th Times, “Dip in Unemployment Claims Offers Hope as New Virus Cases Ease.”  The week of February 1st’s 813,000 people putting in for benefits is still way, way high, but is down from over a million a few months ago.  There is no good reason for so many jobs to end, though many employers, despite Davidson’s observations above, may be adding them too soon.  Normal pre-Covid-19 figures were around 250,000, so, until we see those again, we will know the economy is still sick.

Finally, one thing not to worry about, if you agree it is correct that “Biden and the Fed Leave 1970s Inflation Fears Behind” (Jim Tankersley and Jeanna Smialek, February 15th, The New York Times.)  Some people who should know better have expressed concern that inflation will take off with a large pandemic stimulus package, but far too little money is moving for real inflation, and even the 3-4% we could have this fall would hardly be devastating.  Loan rates remain almost laughably low, as are CD and savings-account interest – to radically change those, it would take more than even Biden’s original stimulus plan’s $1.9 trillion.  So not to worry, and neither about the economy, as, probably within six months, we will be vaccinated.  But hard times still remain, so, please, do what you can and stay patient.

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