There's more gibberish coming today from the US Labor Department with the weekly tally of new unemployment claims from last week. One thing we know for certain is that the labor market is bad, really bad. Beyond that, the figures don't provide much guidance. In normal times, the weekly new unemployment claims doesn't give much guidance, but with the current corona virus and the CARES act underway, the figures are really meaningless.
The problem with the claims can be illustrated by this example. According to the numbers, there was a huge decline in the numbers of new claims in PA for the week over the prior week. In that state, the state unemployment offices were finally ready during the prior week to accept claims from so-called gig workers. Such self employed people never qualified for unemployment until Congress authorized it in the CARES act at the start of the pandemic. It took PA almost a month to be able to accept such claims. For what it is worth, there are still many states that cannot accept such claims. During the prior week, PA received over 100,000 such claims although the exact number has not been released. These sorts of items make the numbers "lumpy". In other words, there are particular bulges and drops in new claims as the states ramp up their abilities to deal with claims.
There is also the issue of people who were furloughed but who are being put back on the payroll because of the Paycheck Protection Program. There should be literally many millions of people who are being covered by that program. People being recalled to work are not reflected in the new unemployment claims, and they may not yet be reflected in continuing claims.
Even the monthly unemployment claims to be released tomorrow are going to be just an estimate, and an old one at that. The survey on which the numbers are based were taken during the week of April 12. That's nearly a month ago which, in these days of the pandemic, was before the PPP kicked in to any extent. As a result, the unemployment numbers should be much worse than they are today.
As I said above, the best way to summarize it is that we know it's really bad, but these figures really don't tell us much more than that.
The problem with the claims can be illustrated by this example. According to the numbers, there was a huge decline in the numbers of new claims in PA for the week over the prior week. In that state, the state unemployment offices were finally ready during the prior week to accept claims from so-called gig workers. Such self employed people never qualified for unemployment until Congress authorized it in the CARES act at the start of the pandemic. It took PA almost a month to be able to accept such claims. For what it is worth, there are still many states that cannot accept such claims. During the prior week, PA received over 100,000 such claims although the exact number has not been released. These sorts of items make the numbers "lumpy". In other words, there are particular bulges and drops in new claims as the states ramp up their abilities to deal with claims.
There is also the issue of people who were furloughed but who are being put back on the payroll because of the Paycheck Protection Program. There should be literally many millions of people who are being covered by that program. People being recalled to work are not reflected in the new unemployment claims, and they may not yet be reflected in continuing claims.
Even the monthly unemployment claims to be released tomorrow are going to be just an estimate, and an old one at that. The survey on which the numbers are based were taken during the week of April 12. That's nearly a month ago which, in these days of the pandemic, was before the PPP kicked in to any extent. As a result, the unemployment numbers should be much worse than they are today.
As I said above, the best way to summarize it is that we know it's really bad, but these figures really don't tell us much more than that.
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