Long-term unemployment 1950 By August 2020
What is the matter?
The graph above shows that long-term unemployment is typically a very endless indicator. This happens because redundancies increase as recessions grow in length.
U1 is 15 weeks or longer, so it took a long time to step in.
BLS Reference Period
The BLS reference period for the household survey that sets the official unemployment rate is the week that includes the 13th of the month.
The reference period for the July job report therefore reflects conditions 12 – 18 July. That’s about 15 weeks since the beginning of this mess.
U-1 Lag
At least since 1950, the U-1 unemployment rate has peaked well after the recession.
It’s unusual for U-1 to jump this fast. Typically, companies cut back on hours, then more hours before mass discharges begin.
The enormous spike in July reflects the immediate economic shutdown.
Number of unemployed 5 weeks or less
Number of unemployed 15 weeks or more
Continuing Claims for Unemployment
As noted on August 6, ongoing unemployment claims are still higher than 16 million.
For the August report (as of September 4), I expect the unemployed to spike above 10 million for 15 weeks or longer.
If so, that would be more than the previous record set in the Great Recession.
Number of unemployed 27 weeks or longer
27 weeks is a key number to look at, as most of the benefits of state unemployment last 26 weeks.
I estimate we’re still 6 weeks away for that to happen.
Ominous setup
- More than 30 million people are on pandemic assistance.
- At least 16,107,000 people do not work hours.
- An additional 15,201,678 people do not qualify for state unemployment insurance, but have collected $ 600 weekly assistance checks.
- An unknown number of those 15+ million work part time.
Pandemic checks stopped
On July 25, the clock went out to $ 600 in Weekly Unemployment Benefits as Republicans and Democrats knocked over the next round of incentives.
On July 29, Trump announced “So Far Apart on Covid Deal That We Do Not Really Care”
On August 5, I commented Trump is considering imposing his incentive plan, Constitution is damned
Those 30 million people will miss the second $ 600 week check there tomorrow.
Talks between Republicans and Democrats over ongoing pandemic benefits have been halted.
It is likely that every deal will be retroactive, but in the meantime, many millions have no means to pay their bills.
Mish
