Economy

Millions Still Filing For Unemployment As Recovery Stalls

JM Ashby
Written by JM Ashby

Trump's White House and the GOP would have you believe we're on the cusp of turning the corner and recovering from Trump's recession, but a spattering of good headlines about consumer spending and stocks do not convey the reality we're in.

An additional 1.3 million people filed new, initial claims for state unemployment last week according to the Commerce Department, but if you include gig-economy workers covered by the soon-to-expire pandemic program, the number was far higher.

Economists had forecast 1.250 million applications last week. First-time claims peaked at a historic 6.867 million in late March. Even now, they remain roughly double their highest point during the 2007-09 Great Recession. Including a program funded by the government, 2.23 million people filed claims last week.

There were 32 million people receiving unemployment checks under all programs in the last week of June, down 433,005 from the prior week. According to economists, this number, which is reported with a two-week lag, offered a more accurate reading of the labor market.

The Commerce Department's latest report also tells us that while consumer spending has increased, it has also receded.

Consumer spending increase by about half as much in June as it did in May.

Retail sales rose 7.5% last month after jumping 18.2% in May, which was the biggest gain since the government started tracking the series in 1992. Economists polled by Reuters had forecast retail sales advancing 5% in June. [...]

Excluding automobiles, gasoline, building materials and food services, retail sales rose 5.6% in June after increasing 10.1% in May. These so-called core retail sales correspond most closely with the consumer spending component of the gross domestic product report.

If congressional Republicans allow the $600-per-week pandemic unemployment program to expire next week, you don't have to be an economist to see how big of a problem that's going to be. Consumer spending is already receding while the program is still giving people money to spend.

If 32 million people are currently receiving those checks, that means about $19 billion will fall out of the economy every single week if the program expires.

Are Republicans really going to push us over that cliff? I want to say even they aren't that crazy, but I don't know anymore.

This economic morass we're in is going to continue until we gain control of the coronavirus and there's little sign we're doing that and plenty of signs that we aren't. The University of Washington's model was updated yesterday with a projection that we'll 225,000 deaths by November.

In other words, an additional 100,000 people will die in the next 4 months -- or about 20,000 in the next four weeks alone -- if they're right

  • muselet

    Are Republicans really going to push us over that cliff? I want to say even they aren’t that crazy, but I don’t know anymore.

    The Rs’ preferred style of negotiation is like the blurb on the cover of the January 1973 National Lampoon: “If You Don’t Buy This Magazine, We’ll Kill This Dog”. The differences are (a) the dog in this case is the economy, and (b) the Rs aren’t making a joke.

    Will they kill Pandemic Unemployment Assistance? Perhaps not, at least if the Ds cave on something important, like zeroing out capital gains taxes, making R presidents immune from congressional oversight, or making trophy wives a deductible expense.

    And even if the Rs deign to do something that would benefit the grubby proles, they’ll make it less beneficial: they’re already arguing amongst themselves over whether to cut the $600 per week benefit to $400 or $200 (can’t disincentivize finding work, don’t cha know).

    This economic morass we’re in is going to continue until we gain control of the coronavirus and there’s little sign we’re doing that and plenty of signs that we aren’t.

    Alas, true.

    –alopecia