What happens when governors and mayors order increased restrictions on commerce, no matter how well-advised those might be? And when government fails to provide compensation for the lost revenue? Businesses start letting employees go, that’s what, as we found out in March and April of this year at the beginning of the COVID-19 pandemic.
It looks like we are about to learn that lesson all over again. The Department of Labor reported an upward spike in weekly initial jobless claims of 137,000 to 853,000. And in a sharp shift from the trends since June, the number of people receiving paid benefits also jumped by an even higher number, emphasis mine:
In the week ending December 5, the advance figure for seasonally adjusted initial claims was 853,000, an increase of 137,000 from the previous week’s revised level. The previous week’s level was revised up by 4,000 from 712,000 to 716,000. The 4-week moving average was 776,000, an increase of 35,500 from the previous week’s revised average. The previous week’s average was revised up by 1,000 from 739,500 to 740,500.
The advance seasonally adjusted insured unemployment rate was 3.9 percent for the week ending November 28, an increase of 0.1 percentage point from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending November 28 was 5,757,000, an increase of 230,000 from the previous week’s revised level. The previous week’s level was revised up 7,000 from 5,520,000 to 5,527,000. The 4-week moving average was 5,935,750, a decrease of 260,250 from the previous week’s revised average. The previous week’s average was revised up by 1,750 from 6,194,250 to 6,196,000.
CNBC notes that the topline hit the highest number in nearly three months. Economists had predicted a small increase, not anything of this size. However, it appears that some of this might be a Thanksgiving hangover:
The pace of weekly jobless claims jumped last week after filings caught up with a decline due in part to the Thanksgiving holiday.
First-time claims for unemployment insurance totaled 853,000, an increase from the upwardly revised 716,000 total a week before, the Labor Department reported Thursday. Economists surveyed by Dow Jones had been expecting 730,000.
Recall that there had been a slightly surprising decline in last week’s figures. At that time, I predicted that the short holiday week might have pushed some of the reporting out a week. Even at that, though, last week’s number was 71,000 lower than the previous week, and the increase in today’s report nearly doubles that in the other direction. And a Thanksgiving hangover wouldn’t explain the sudden and significant jump in those receiving paid benefits, the first time that metric showed any increase at all since August.
Combined up with the lackluster November jobs report, this shows an economy on the brink of a bad recession — again. The Wall Street Journal notes that the same jobs that provided the bounceback this summer are the ones evaporating again now:
“Job destruction has not come to an end,” Andy Challenger, senior vice president at outplacement firm Challenger, Gray & Christmas Inc., said before Thursday’s data. “We might be gaining jobs overall, but thousands of people are losing their jobs every week because demand has not returned.”
The broader labor-market recovery is continuing, but showed signs of slowing in November. Employers added 245,000 jobs last month, the Labor Department said last week. While it was the seventh consecutive month of gains, hiring has cooled. At November’s rate of job growth, employment wouldn’t return to pre-pandemic levels until 2024.
Mr. Challenger said recent layoffs have occurred in the entertainment and leisure industry, including at restaurants, as well as at retailers and in the transportation sector, at employers including airlines and transit authorities. Many workers laid off this spring expected to return to their jobs fairly quickly. Those laid off in recent weeks are more likely to have seen their position eliminated, Mr. Challenger said.
“When someone is let go today, that means the company doesn’t see that job existing for a while,” he said.
Under these circumstances, some backstop is needed to keep people employed through another round of shutdown orders. What’s the status of the talks on Capitol Hill? Nonexistent, according to Bloomberg this morning:
Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi have given no sign yet that they’re ready to directly engage in negotiations to sort through competing pandemic relief proposals — a step that many lawmakers say will be necessary to complete a deal this month.
The Senate GOP leader is now on board with a $916 billion proposal released Tuesday by Treasury Secretary Steven Mnuchin, while the House speaker sees a rival $908 billion plan still being drafted by a bipartisan group of lawmakers as the best path to a deal to aid the struggling U.S. economy.
Their positioning shows consensus emerging on an overall price tag. But the proposals differ on key features. Although their proxies are engaged in negotiations, the top congressional leaders haven’t yet planned a tete-a-tete to resolve the outstanding issues.
Well, y’know … no rush, or anything. Take your time. It’s not as if businesses are going under and people are getting desperate. Oh, wait …
The coronavirus recession has been a relentless churn of high unemployment and economic uncertainty. The government stimulus that kept millions of Americans from falling into poverty earlier in the pandemic is long gone, and new aid is still a dot on the horizon after months of congressional inaction. Hunger is chronic, at levels not seen in decades.
The result is a growing subset of Americans who are stealing food to survive.
Shoplifting is up markedly since the pandemic began in the spring and at higher levels than in past economic downturns, according to interviews with more than a dozen retailers, security experts and police departments across the country. But what’s distinctive about this trend, experts say, is what’s being taken — more staples like bread, pasta and baby formula.
“We’re seeing an increase in low-impact crimes,” said Jeff Zisner, chief executive of workplace security firm Aegis. “It’s not a whole lot of people going in, grabbing TVs and running out the front door. It’s a very different kind of crime — it’s people stealing consumables and items associated with children and babies.”
This is an utter disgrace. Government is forcing these businesses to close. Under Pottery Barn rules, they broke it — they bought it. We can argue about where and how the money originates, but we’ve been arguing about it for four months now. The election took place five weeks ago. And still, the two people who are the deciders on legislation haven’t even deigned to sit down together to hash it out. Pathetic doesn’t even begin to describe it. Congress is undermining its own institutional credibility every day in this crisis that they don’t act. The lights have been flashing red for weeks now, and yet the Beltway’s asleep … or just more obsessed over their own interests than with those of their constituents.