Unemployment benefits

New US jobless claims for the week that ended Saturday totaled 898,000, the Labor Department said Thursday. The reading came in above the consensus economist estimate of 825,000, and also marks an increase from the previous week’s revised figure.
Continuing claims, which track Americans receiving unemployment benefits, fell to 10 million for the week that ended October 3. That was lower than economist forecasts.
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The number of Americans filing for unemployment insurance rose last week, indicating discouraging progress around the US labor market’s ongoing rebound.

New US weekly jobless claims totaled an unadjusted 898,000 for the week that ended Saturday, the Labor Department announced Thursday morning. That reading came in above the median economist estimate of 825,000 compiled by Bloomberg, and also reflects an increase from the prior week’s revised total.

Continuing claims, which track the aggregate total of Americans receiving unemployment benefits, slid to 10 million for the week ended October 3. The reading came in slightly below the median economist estimate of 10.6 million.

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Roughly 65 million unemployment-insurance filings have been made since early February, trouncing the 37 million sum seen during the 18-month Great Recession. Thursday’s report comes in well below the highs seen earlier in the pandemic but still lands above the 665,000 filings made during the Great Recession’s worst week.

The millions of Americans still unable to find work are set to endure tougher economic conditions in the near term. Democrats and Republicans remain far apart in reaching a stimulus compromise, and Wall Street economists increasingly expect new fiscal relief to arrive after the November elections.

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While most polls point to a strong Biden victory in the presidential race, Senate election outcomes will “mean the difference between substantial fiscal expansion and fiscal gridlock,” Morgan Stanley said in a Wednesday note.

The lack of another expansion to unemployment benefits also leaves jobless Americans more prone to lingering debt through the pandemic. A recent study by researchers at the Federal Reserve Bank of New York found that Americans on unemployment insurance benefits used nearly half of the benefits to pay down debts. Roughly 24% of the payments were used for buying essential goods, and 23% were saved.

Read more: Morgan Stanley lays out its 5 favorite trades for investors looking to dominate a looming V-shaped recovery, even if a stimulus deal takes until 2021

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Kansas 4x3
Stacie Sulzen.

The Unemployed States of America takes readers deep inside the decimated American workforce.
Stacie Sulzen is a 51-year-old bartender based in Kansas City, Kansas.
Her bar closed at midnight on March 16, and she hasn’t been back since.
It took her about three months to start getting unemployment, and she didn’t have any money left by the time it arrived.
This is her story, as told to Jill Dutton. 
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I’d worked as a bartender for 27 years when the shutdown of the bars went into effect in Kansas. I was working at Reich’s Club, a small dive bar in Kansas City, Kansas, when the owner told me on March 16 to close the doors at midnight. 

I haven’t been back since.

It was such an uncertain time. I didn’t know what I was going to do, but I didn’t really think it would last. I figured a week or two and things would start going back to normal. The day after closing, I went out and bought a bunch of cans of soup and TV dinners.

The bar was sold during the shutdown period and the new owner, not knowing how long it would last, began gutting the bar to make renovations. At first, when I heard the previous owner washed his hands of it, I wondered if I’d have a job to go back to at all. The new owner does plan to bring us back, but it’s not ready to open yet.

In 27 years as a bartender, I’ve never taken a day off that I was scheduled to work. I would even cover other people’s shifts, often working double shifts. I just worked all the time. So at first, it was kind of neat to have some time off. You don’t get vacation days when you’re a bartender. There’s no insurance, no 401(k) — you live on tips and that’s how you live.

The first couple weeks, it was nice to sleep in and know that no one was going to call me into work. Then it got to the point where I was ready for the vacation to be over and get back to work. Food was running out; money was running out. It took about three months to start getting unemployment. 

Luckily, I have friends and family that helped me out. For my bills, when they would call, I would tell them that as soon as I had some money, I would send it their way. I was lucky that I never got any threats of the electricity being shut off, and my landlord was very kind and never said a word about my rent being late. I was very fortunate because I knew a lot of people who didn’t have understanding landlords.

By the time I received my first unemployment check, I didn’t have any money left.

I paid my electric bill and gave the rest of that first check to my landlord, except for a small bit I kept for myself. I did that again with the next few checks. So for the first month of getting unemployment I was still broke, because I was trying to catch up from three months of arrears.

The Kansas unemployment site was screwy, too. Even once I was getting checks, the site would go down and I couldn’t file a claim. Or I would file a claim and get an error message. It was a mess. It took me probably a month to get through by phone to the unemployment office just so I could get the errors fixed regarding the back pay I was owed. For those three months of unemployment in the beginning, I was owed five weeks of back pay. Finally, last week, I received the back pay.

I used the money to pay off all my bills. I actually paid ahead because I don’t know how long this will continue. My eligibility for unemployment has now run out. I filed for an extension a couple weeks ago, but again, haven’t heard anything yet.

When I was younger, I did some factory work. It seems like everyone I know who works in a factory hasn’t missed a beat because they’re considered essential workers. So I was thinking about doing that. I mean, there have been threats of them shutting the bars down again, so bartending or serving doesn’t look too promising going forward.

I have a job waiting for me when the remodeling at the bar is finished, but I can’t go to work until then. And even then, only half-capacity is allowed, so there isn’t much opportunity for tips.

I’m thinking factory work will be where I need to go.

I’ve been happy bartending — especially the socialization that comes with the job — so I know I’ll miss that if I have to take a factory job. Really, I worry that I won’t be able to find any job. What if everyone else decides to do the same thing as me and go into factory work? There might not be a job to go to. 

I’m glad I was able to prepay my bills for a few months, but after that, the future looks uncertain.

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Employers added 1.8 million jobs in July and the unemployment rate fell to 10.2%, marking only partial progress toward recouping massive losses tied to the coronavirus pandemic. Jeff Sparshott and Greg Ip here to take you through the key numbers.

Maybe Not a V, but Not a U Either

July’s payroll growth, at 1.8 million, still leaves total payrolls 12.9 million lower than in February. And yet if job gains continued at July’s pace, that deficit will be erased by March, 2021. If payrolls reclaim their last peak in 13 months, that would be remarkably fast. It took more than six years after the last recession. So can they maintain that pace? In July, job gains were blunted by a resurgence of the virus in the South and West which put the brakes on economic reopening. With cases slowly trending down now, economic activity should pick up, though that hasn’t shown up yet in private data such as credit card spending. Spending could also take a hit from the recent expiration of enhanced unemployment insurance benefits; Congress is struggling with an extension. And it’s unlikely that the pandemic is going to completely disappear by next year, so neither will the damage to many industries such as tourism and retailing. —Greg Ip

KEY THEMES

Labor-Market Churn

The unemployment rate fell for mostly the right reasons. Some people dropped out of the labor force but not nearly as many as found a job. Measures across the board improved, including the share of workers who wanted full-time work but were stuck in a part-time job.

The number of workers on temporary layoff fell and the number of permanent job losses was little changed last month, suggesting that many workers are getting recalled to old jobs or are able to switch into new ones. “The rate of churn in the labor market remains incredibly high, but a notable positive detail in this month’s report was the downtick in the rate of new permanent layoffs,” economists at Morgan Stanley wrote.

One potentially worrisome sign: The number of long-term unemployed is on the rise. That suggests that some people are at risk of getting locked out of the labor market—and ultimately exhausting unemployment benefits.

Job losses and gains haven’t been evenly distributed. Initially Blacks were less hard-hit than some other racial groups in the early stages of the recession, but the drop in their unemployment rate in July was the smallest among racial groups. —Greg Ip

Some of that was due to growing labor force participation; the Black employment-to-population ratio rose more than for Hispanics and whites. —Greg Ip

Who’s Hiring?

Some of the industries hit hardest by March and April lockdown orders experienced some of the biggest gains last month. Bars and restaurants, retailers, healthcare, laundry services and gambling halls posted big gains from June to July, reflecting efforts to reopen the economy by relaxing social distancing requirements.

While positive, July’s gains only begin to retrace earlier losses. And it’s not clear that the Labor Department data fully captured rising Covid-19 caseloads toward the end of July, which caused state and local governments to halt or roll back reopening plans and consumers to show renewed caution.

Not everything may be as it seems with the monthly figures. Government jobs, mainly in public schools, rose by a seasonally adjusted 300,000 in July. That’s welcome relief for a sector that typically stabilizes the economy in downturns, but which has been hard hit by the pandemic. However, it may be a mirage. On an unadjusted basis public-school jobs continued to decline in July, but the decrease was smaller than seasonal factors expected—because so many jobs have already been cut. Bottom line: If large school districts holding class online this fall don’t rehire staff, job losses will resume in the public sector soon. —Eric Morath

Can We Fix It?

One final note: The Labor Department appears to have largely solved misclassification problems that had artificially suppressed the unemployment rate. In March, April and May the agency counted millions of workers as absent—something that usually applies to vacation or sick leave—when they probably should have been classified as unemployed. That subtracted as many as 5 percentage points from the headline rate. The issue now accounts for less than 1 percentage point, Labor said Friday.

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WHAT ECONOMISTS ARE SAYING

“This is not a V-shaped recovery. Adding 1.8 million jobs is not sufficient for any sort of speedy recovery after the astronomical job losses of early spring.” —Nick Bunker, Indeed

“The pace of job growth slowed in July, but the gains over the past three months represent an impressive rebound during the ongoing economic challenges brought forth by the pandemic.” —Mike Fratantoni, Mortgage Bankers Association

“Recovery in jobs to pre-pandemic levels will likely be slow and prolonged, one that will restrain the pace of recovery.” —Rubeela Farooqi, High Frequency Economics

“These numbers suggest that the surge in virus cases since late June has so far not prevented the continued re-opening of the economy at the national level.” —Brian Coulton, Fitch Ratings

“The slowdown we’re seeing is a reminder that a return to economic stability is ultimately hinged on addressing the public health crisis.” —Daniel Zhao, Glassdoor

“The economy is expanding, but the pace of improvement has slowed.” —Jim Baird, Plante Moran Financial Advisors

“The huge remaining level gap in employment—still 12.9m lower than in February before the Covid shock hit—will keep the Fed firmly focused on supporting the recovery.” —Krishna Guha, Evercore ISI

“The payroll count still reveals a slowing in the pace of the labor market recovery. In the absence of additional fiscal aid, the broad economy risks losing momentum as it shifts into the second phase of its rehabilitation.” —Kathy Bostjancic, Oxford Economics

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We’re four months into our new pandemic-altered reality, and while businesses straddle the line between reopening and shuttering (again), many Americans are finding their jobs no longer exist. Last week, 1.3 million Americans applied for unemployment insurance for the first time. Self-employed, independent contractors and gig economy workers — a vital and burgeoning contingent of today’s workforce — remain especially hard hit. 

Is there a light at the end of the tunnel? It depends on who you ask and how you approach it.

Nearly 13 million Americans are receiving unemployment benefits via the Pandemic Unemployment Assistance (PUA) program, which aims to help gig economy workers and those not traditionally eligible for unemployment benefits. PUA recipients make up 41% of the 31.5 million total unemployment benefit recipients nationwide as of June 13, according to recent Labor Department statistics

Even with these guardrails in place, not everyone is benefitting.

The racial inequality workforce problem

For Black Americans, long-standing racial inequities have made the financial impact of COVID-19 even more extreme. According to the Pew Research Center, 44% of Black Americans reported that they or someone in their household experienced a job or wage loss due to COVID-19, compared to 38% of white Americans. More than two-thirds of Black adults (73%) said they did not have emergency funds to cover three months of expenses, while just 47% of white adults said the same.

What’s more, an analysis of Labor Department data by the University of California, Santa Cruz found that more than 2 out of 5 Black small businesses and self-employed workers have been forced to shutter during the pandemic — well over twice the rate of white businesses. 

At Steady, we’ve created a platform that helps people find high demand jobs, increase their income and plan for more financially stable futures. We recently opened up an emergency cash grant program as a result of the pandemic, and so far, 46.5% of our applicants have been Black. 

Navigating the new job market and how we’re helping workers

It’s devastating to see American workers hurting and to so clearly witness how racial inequities are compounding that hurt. Steady recognizes how challenging life is right now and we want to serve as an immediate resource for those who need work and/or additional income.

Mint has long supported people in managing and optimizing their finances, so with all of the hardship brought on by COVID-19, it made sense to join forces with Steady to encourage personal financial empowerment for all Americans. On average, Steady members earn more than $4,000 per year in additional income and in response to COVID-19, we’re offering emergency cash grants, telemedicine support and rapid ACH cash deposits.

What will the future hold?

Pre-pandemic, we lived in a world where there were more jobs than job seekers, or at least a healthy 1:1 ratio. Now workers are struggling in a world where there’s maybe 1 job for every 4 job seekers.

Together with Mint, Steady is here to help everyone navigate these difficult times. We’re committed to empowering workers and helping people find jobs that are still in-demand and right for them. To get started and see available work in your area, download the free Steady app here

The post Navigating the Current Job Market and Empowering Workers appeared first on MintLife Blog.

Original Source: blog.mint.com

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Wrong Way

Filings for weekly unemployment benefits rose for the first time in nearly four months, a sign the jobs recovery could be faltering. Initial unemployment claims rose by a seasonally adjusted 109,000 to 1.4 million for the week ended July 18, halting what had been a steady descent from a peak of 6.9 million in late March. The data also show that the number of people receiving benefits has shrunk in recent weeks. Taken together, claims and benefits totals suggest new layoffs are being offset by hiring and employers recalling workers, though at a slower pace than a few weeks ago, Eric Morath reports.

Last week’s increase in applications came after several states imposed new restrictions on businesses such as bars and restaurants when coronavirus cases rose.

WHAT TO WATCH TODAY

IHS Markit’s U.S. manufacturing index for the opening weeks of July is expected to rise to 52.0 from 49.8 at the end of June. Services are expected to rise to 51.0 from 47.9. (9:45 a.m. ET)

U.S. new-home sales for June are expected to rise to an annual pace of 702,000 from 676,000 a month earlier. (10 a.m. ET)

The Baker Hughes rig count is out at 1 p.m. ET.

TOP STORIES

Ugly, Bad and Good

Jobless claims aren’t the only data suggesting trouble for the labor-market recovery. U.S. employers added 4.8 million jobs in June, helping recoup some of the massive losses from earlier in the year. But the Census Bureau’s weekly household pulse surveys, which tracked the big rise that month, now indicate that a resurgent pandemic has reclaimed most of those gains. Of course, other indicators point to continued job gains, the weekly survey is a new product and it isn’t meant to stand in for the official monthly report. Even so, the dropoff is a worrisome sign for a struggling labor market.

Time is running short for millions of unemployed Americans. Senate Republicans scrapped their plans to release a proposal for the next coronavirus relief bill after continued differences with the White House on unemployment insurance and direct cash payments. With the delay, Republicans won’t roll out their roughly $1 trillion legislation until next week, further compressing an already tight timeline to reach an agreement with Democrats and pass a fifth coronavirus relief bill. A $600 weekly supplement to state unemployment benefits is set to expire July 31, though it will effectively end in many states this weekend, Andrew Restuccia and Andrew Duehren report.

Once Congress does approve an economic relief package, a second round of stimulus payments could reach many Americans faster than last time. The Internal Revenue Service now has procedures, online tools, bank-account information and coordination with other agencies that it didn’t have set up in advance when the first round of payments was approved in the spring, Richard Rubin reports.

Another bit of good news: Some of the businesses hit hardest by the pandemic are driving the jobs recovery. Health-care providers and restaurants—which closed during lockdowns—have recalled millions of laid off workers. Job growth has also been boosted by increased demand in a handful of industries, including logistics firms, financial services and retailers such as furniture stores, Eric Morath and Kim Mackrael report.

Corporate America Doesn’t Expect This to Be Over Soon

Hershey said subdued Halloween celebrations this year as a result of the coronavirus pandemic could hurt candy demand during a holiday that typically generates a tenth of its sales. The owner of Reese’s and Jolly Rancher said it is planning to make less Halloween-themed candy to avoid having loads of leftovers that it would have to pull back or try to sell at a discount, Annie Gasparro reports.

AMC Entertainment is pushing back the reopening of its U.S. theaters to mid-to-late August, after a number of summer blockbusters delayed their release dates. The nation’s largest theater chain previously said it would reopen at the end of July. U.S. theaters closed and Hollywood studios halted the release of major motion pictures in March as the pandemic took hold, and they remain in a holding pattern as several states are experiencing a resurgence in Covid-19 cases, Dave Sebastian reports.

Walt Disney canceled the planned August release of “Mulan” and said it would also delay the release of future installments in the “Avatar” and “Star Wars” series by a year, R.T. Watson and Erich Schwartzel report.

American Airlines and Southwest Airlines said they were tempering expectations for an air-travel recovery, as mounting coronavirus cases have driven down bookings by as much as 80% in some parts of the U.S. Southwest said cancellations are picking up and demand looks weaker heading into fall. Executives at American said bookings have started to slide and business travel, which usually picks up after Labor Day, shows no signs of resuming, Alison Sider and Doug Cameron report.

“In short, the crisis continues,” American Chief Executive Doug Parker said.

Europe’s Comeback

Encouraging news from Europe: Purchasing managers indexes for the U.K. and eurozone returned to growth this month, with output advancing at the fastest rate in years. The data suggest some economic rebound in the third quarter after a disastrous spring. “The concern is that the recovery could falter after this initial revival. Firms continue to reduce headcounts to a worrying degree, with many worried that underlying demand is insufficient to sustain the recent improvement in output,” IHS Markit economist Chris Williamson said. Manufacturing and service-sector activity are still contracting in Japan, though not as severely as prior months. U.S. data are out at 9:45 a.m. ET.

There’s Gold in Them Thar Hills

The price of gold neared an all-time high that has stood for almost nine years on Thursday, punctuating a furious rally driven by anxious investors seeking refuge from the coronavirus-induced economic slowdown. Prices have risen nearly 25% this year, extending an advance that began early in 2019. The coronavirus has sparked a global gold rush, with physical traders in London and New York trying to get their hands on more metal and individuals around the world ordering bars and coins, Amrith Ramkumar reports.

TWEET OF THE DAY

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