Economy

Jobless Claims Remain Above 1 Million

JM Ashby
Written by JM Ashby

Although new, initial claims for unemployment fell below 1 million in the first week of August for the first time since the coronavirus pandemic began, claims climbed back above 1 million the following week and have remained there since.

New claims fell slightly last week compared to the week before, but they remain above 1 million as Republicans in Congress refuse to pass any meaningful stimulus measures.

Though new COVID-19 infections have subsided after a broad resurgence through the summer, many hot spots remain, especially at college campuses that have reopened for in-person learning. With the fiscal stimulus ebbing, signs are growing that the economy’s recovery from the pandemic is slowing. Some economists are dialing back lofty growth estimates for the third quarter.

Initial claims for state unemployment benefits fell 98,000 to a seasonally adjusted 1.006 million for the week ended Aug. 22, the Labor Department said. Economists polled by Reuters had forecast 1.0 million applications in the latest week.

Because this is a seasonably adjusted number, it's possible it will be revised upward next week. It could also be revised downward, but the former is more likely because jobs that normally materialize during the busy summer months to handle crowds won't this year. There are no crowds.

More interestingly, a separate report released by the Commerce Department this morning gave us a new snapshot of what was happening before we shut down any part of the economy.

In a separate report on Thursday, the Commerce Department said gross domestic product plunged at a 31.7% annualized rate last quarter, the deepest decline in output since the government started keeping records in 1947. That was revised from the 32.9% pace reported last month. [...]

When measured from the income side, the economy contracted at a 33.1% rate in the last quarter. Gross domestic income (GDI) declined at a rate of 2.5% in the January-March period. The average of GDP and GDI, also referred to as gross domestic output and considered a better measure of economic activity, decreased at a 32.4% rate last quarter. That compared to a 3.7% pace of decline in the first three months of the year.

Economic activity declined by almost 4 percent under Trump's "great" economy before the pandemic.

Only a handful of areas had shut down their economies by the end of March. Most states did not until April, some didn't until May, and some never really did.

This is why I firmly believe that if Trump is reelected, we'll never fully recover or at least not in the next four years. Trump's disastrous policies, from his trade war to his tax cuts and his war on health care, were already catching up to us before we shut down our economy. The pandemic buried what was left of the Obama administration's economy and Trump is incapable of bringing it back.

  • muselet

    The economy sucks.

    The economy will continue to suck until such time as the US gets the pandemic under control, and even then, it will be on life support for an extended period.

    A sane, never mind humane, administration would long ago have begun throwing money at the problem (deficit spending in a time of effectively 0% interest is a cheap investment). With luck, the Biden administration will be sufficiently competent to control Covid-19 and sufficiently Keynesian to prop up the economy for as long as necessary.

    Vote as if your life depends on it (it does).

    –alopecia

  • katanahamon

    The NBA (players, that is..) looked like they were going to really stand up and cancel their season due to all these shootings, but, the almighty dollar wins. They caved and of course are going to continue to play. This is why I’ve had a problem with “taking a knee.” It’s super easy, convenient for the athletes as it doesn’t impact their free time, requires all the effort of..kneeling for maybe sixty, ninety whole seconds, and they get to have the appearance of really “taking a stand against racism” all the while continuing to play a game, collect their salaries and further their careers. It’s great to make a statement, but if that statement is never backed up by any other hard work, real effort in truly constructive solutions, or at all, then they are hollow, useless, and near hypocritical visual stunts that make the players feel good about themselves and accomplish nothing.

    • JMAshby

      Unless you are a black man and, moreover, a black athlete who represents not just their community but also their teammates, I don’t think you should tell them how or when to protest.

      Many professional sports players do invest in and help their communities. Last night’s NBA protest was led by Lebron James. James built a school for disadvantage black kids in Akron and he’s also leading a new effort to recruit poll workers.

      https://www.cnn.com/2020/08/26/us/lebron-james-poll-workers-vote-trnd/index.html

      Most leagues even have their own rewards for players contribute to society, such as the NFL’s Walter Payton award.