Unemployment Figures Even Worse Than They Look
For the second straight day, I'm going to write about numbers and their relation to the current reality on the ground. Yesterday, it was the case numbers for COVID-19, and today we've got new unemployment numbers to examine.
The Department of Labor just announced a rather staggering number -- almost 3.3 million new unemployment insurance claims nationwide in the past week alone. That sets a grim new record for this one-week statistic, far outpacing any previous spike (it's never even gone above one million before, ever). But this record is almost certain to be a huge undercount, which means that next week could be much worse. And by the time they get around to releasing the adjusted numbers (which usually takes a few months) which show the actual reality of the situation, we'll all have moved on.
Politico ran an article today which gives us some data points to see how far off the mark the official federal number may actually be. It begins by explaining why the problem exists:
The 3.3 million new unemployment insurance claims that the Labor Department reported Thursday is likely a significant undercount, experts say, because laid-off workers have been calling into state unemployment agencies much faster than the agencies can process their requests.
"There is reason to believe... that even the 3.283 million figure understates the case," said Richard Moody, chief economist at Regions Financial Corporation. "Many states have reported their systems for processing claims have crashed under the weight of unprecedented volumes."
A tidal wave of workers trying to file claims has overwhelmed websites and jammed phone lines at state unemployment agencies, leaving states scrambling to hire more staff.
This means the claims come in faster than they can be processed. Much faster, in fact. Data is then given for three states, two of which have been hit particularly hard by the crisis. Last week, the New York State Labor Department got 1.7 million phone calls from newly-unemployed people. The federal Department of Labor's official number, however, showed only 80,334 New Yorkers applied last week. In Texas, the state reported receiving more than 800,000 calls last week. The official federal number for Texas was only 155,657. California reported they had received over a million calls in the past two weeks, but the official number from the feds for last week in California was only 186,809 new cases.
When you add these numbers together (assuming only half a million for California, for one week), you get around three million newly-unemployed people in just three states. However, the official federal statistics show only 422,800 new cases from those states. That works out to only 14 percent of what the states themselves are reporting. Multiply this result by the nationwide figure (3.283 million) and you get a new estimate -- what could be a whopping 23.3 million unemployed people in a single week. That could be the real scope of the problem -- roughly a sevenfold increase.
Of course, things could be slightly better than this. Not every state is quite so overwhelmed with processing unemployment claims, one would have to assume. Perhaps the three states the article cited are at the most extreme end of the scale. Even so, it is still going to result in a figure much higher than what just got reported. When you can add up 3 million new unemployment claims in just three states, it's pretty obvious that the official national figure of 3.3 million is woefully understating the case.
Even an adjusted number won't accurately reflect reality, however. These numbers are just for those who are actually eligible for unemployment insurance payments. Which doesn't include gig workers, self-employed workers, those who don't make enough money to qualify, and those who have been on the job for only a few months.
These are just the weekly numbers, as well. At the end of next week, we should get the monthly unemployment report which is supposed to show the overall rate of unemployment across the country. Right now, economists are predicting that number is going to jump from 3.5 percent to 5.5 percent in a single month. That's a pretty big jump, but this number will also be inaccurate to some degree or another. Since their data applies to the whole month, the full scope of the crisis won't really be evident. If businesses were polled in the middle of the month, then that's not going to reflect the situation at month's end, to put it another way. We likely won't be able to see numbers reflecting anything close to the true situation on the ground until the end of next month. And my guess is the increase next month is going to dwarf what we're seeing now.
As for how high the unemployment rate could eventually go, nobody really knows. Estimates that I've seen range from 20 percent to 30 percent. We may see an unemployment rate greater than the worst of the Great Depression, in other words. During the more-recent Great Recession, the unemployment rate only scraped 10 percent at its worst. So take a snapshot of where America's economy was back then, and then double or triple it.
This could all turn out to be too pessimistic, to be fair. We may not even hit 20 percent unemployment, especially if President Trump convinces enough governors to open up for business by the middle of the month. Some will follow Trump's lead, but already there is pushback even from some Republican governors. Governors, after all, are really the ones to make this call, not Trump. But if some of them do follow his "open everything by Easter" lead, it could put a lot of people back to work and things might not turn out as bad as the worst-case scenario. Of course, what this risks is opening up a second wave of infections in the places where social distancing ends too early. Which could, in the end, even make things worse, as these places get hit much harder than they would have (if they had continued the restrictions longer).
Still, it's hard not to be alarmed at the sharpest unemployment spike in recorded American history. Especially knowing that the situation is almost certainly far worse than even the initial number we got today, perhaps by a factor of seven. The real question, though, isn't so much how high the numbers go as how fast we can recover from them and start clawing our way back to normal. The country is already taking an enormous economic hit from the crisis, and that is going to continue for the near future, at the very least.
But just keep in mind over the course of the next month that there is going to be a lag time between when people apply for unemployment and when that fact is reflected in the official Labor Department numbers. This week was bad. Next week will almost certainly be worse. This month's unemployment rate is going to jump significantly. Next month's will jump even steeper. After that, things could -- only "could," mind you -- begin to get better and not worse. But we're still in for a whole month of historically bad unemployment news before we get there.
-- Chris Weigant
Follow Chris on Twitter: @ChrisWeigant
Well, almost everyone has been laid off, so, you know. Not sure why so many news reporters are so off their chairs about this totally expected reality.
The numbers in Canada are higher than reported, too as some of us will be applying for EI in the coming days.
Let's just hope that the majority of people laid off will be back to work when this 'problem' is over.
Chris,
https://www.nytimes.com/2020/03/26/opinion/coronavirus-2020-election.html
I read this in the NYTimes today about how the epidemic in the US should not infect the democratic process and the elections in November.
Since you last wrote about this, I haven't heard much about it but it is starting to feel like the worst could possibly happen.
Coronavirus 24/7 coverage has drowned out most other important news, including the 2020 presidential election. I mean, has Bernie dropped out yet? Have the rest of the primaries been postponed or cancelled? Where's Biden!?
If this wasn't an infinitely critical election, then I probably wouldn't care so much about the answers.
Let's just hope that the majority of people laid off will be back to work when this 'problem' is over.
I would just add that what president Trump is hoping for with respect to people getting back to work, governor Cuomo is acting to ensure.
Getting people back to work is what governments should be focusing on alongside mitigating the spread of the virus.
Oh, man, Don!
I was right with you up until Nader.
The stimulus package is not enough - in your country or mine. But, it will probably get better if only because it HAS to.
As Bill Gates has said tonight, the bad medicine (another good tune, by the way) that countries have to take, economically speaking, must be taken if we are to beat this virus down now and not have to come back to try to do it all over again later.
Which is why governments must understand what they need to do to protect workers and companies during this crisis and what they need to do to ensure that there will be an economy that can quickly recover after the crisis.
And, governments need to learn the lessons of this pandemic so that we are all ready for the next one.
Chris,
Greenhouse workers involved in the productions of flowers are now an essential service in Ontario.
Absolutely, positively, unequivocally!
Don, let's just get Biden elected and take it from there. That's where I'm at now and for the foreseeable future.
If Trump is re-elected, then all options are dead, including OD.
I think vegetable growers are essential, Don.
Like democracy.:D
Did you read the article I cited above?
It would be too late by the time he was in office to take the action that needs to happen now even if he were to take it after winning.
I've read that a couple of time and I'm not sure what it means ...
Don[15],
Heh. You'll get used to it, I believe.
Don, I think a universal basic income is the way to go and this outbreak offers a phenomenal opportunity to get it started!
Really, I thought the NYTimes was taking the paywall off for all coronavirus related pieces??
Well, it basically says that you can't let this outbreak disrupt the political process and that work needs to be done now to ensure that people can vote without fearing for their health.
It doesn't get into much detail though on what needs to be done so I'm hoping Chris will write more about it.
I'm just going to go ahead and ignore [20].
Call me obtuse but, I still don't get it. Why won't you vote for Biden. Why must the goals of OD be in effect before you elect Biden?
I hear what you're saying in [23] and I agree!
On a not unrelated note, just heard about this call for PPE on Cuomo Prime Time:
https://www.aha.org/initiativescampaigns/2020-03-26-100-million-mask-challenge-manufacturers
It's an initiate across the US now to get the PPE that healthcare workers need NOW!
I guess I just think that I know Joe Biden better than that. I know he is a terrible campaigner and fundraiser - always has been.
However, once he gets elected I think you will see him in a different light based on how he governs.
At least, that has been my hope for Biden for a very, very, very long time. :)
Of course, I know well that I've disappointed by many a politician and so I won't be too surprised if it happens again.
I think I get it now. But, I still think you should vote for Biden, anyway.
It's that whole timing issue, you know. :)
Need to get sleep … until tomorrow.
Nice writeup, CW... stellar, in point of fact.
Remember that time Trump announced his run for the presidency and he insisted "the real unemployment is anywhere from 18% to 20%"?
Oh, wicked Irony... does't thou have no shame?
The unemployment rate was well below the historical norm when Donald Trump took office, and he routinely referred to that statistic as "fake"... so how long do you suppose it will be before Trump reverts right back to referring to the BLS unemployment numbers as "fake" and a "hoax"?
Asking for ~3.3 million friends. :)
DH
And the best way to do that is to call for Ralph Nader to run the give us want we want or deal with a spoiler campaign.
Yeah, announcing that you are not really running because you want the job but are doing it to get Biden to run a small donor campaign at this point — ignoring that most large donors have already given the maximum donation, so making the switch at this point would not accomplish anything other than allowing you to say this was all your idea — is about as idiotic of an idea as any I have ever heard! But again, you aren’t interested in actually causing real change as much as you want credit for starting this faux revolution of yours!
First, you are putting a lot more weight into Nader’s popularity than is probably wise! Not to mention that Nader has no reason to want to do this! And you trying to convince CW that HE should push this “Nader as a spoiler” campaign is just another example of you trying to get someone else to do the work on an idea that you just want the credit for!
It would be too late by the time he was in office to take the action that needs to happen now even if he were to take it after winning.
Exactly, so what good does Nader blackmailing Biden accomplish in that fantasy world of yours? And one last thought...why would Biden follow thru with anything Nader demands once he wins the presidency?
FPC
Liz,
Well, Michale, you have a lot of power to bring this place back to the friendly place it used to be all on your own.
Yea, we have tried that, again and again and again..
It never seems to work because it is ONLY you and I that shoulder the burden..
But, for some reason unknown to me, you refuse to join me in that effort unless others follow suit.
Even you must see the futility of it after all our efforts..
When you have haters like Victoria and Russ and all the rest of them who never stop...
It's an impossible task..
It's really that simple..
Well, this is a fine kettle of fish... on top of everything else I got a mild case of the flu.. :(
I NEVER get sick!!!
Oh well, life goes on...
Hey, Biden is going to do a town hall tonight on
CNN! He's alive! :)
Michale, what does FPC at the top of your comment mean?
Even you must see the futility of it after all our efforts..
Michale, I don't get it.
What's stopping you from just ignoring the noise around here and just having a friendly conversation with … well, with me?
Don,
Will it get us everything? No.
But it will get us more sooner instead of a few crumbs and temporary measures that will be coming too late and will not be what is needed.
I'm guessing that a president Biden will surprise the heck out of you.
Just don't write in Nader on election day!
Sorry I asked.
It's time for working together to mean that Biden and the Dems have to make the one single concession that we want to earn our votes.
You mean … there's more than one of you who is itching to screw this thing up!?
That's just plain crazy, Don. You're not even willing to give the guy a chance. You'd rather have four more years of worse than the same old.
I don't think I've ever run in to somebody like you who is so willing to cut off their nose to spite their face. You really are something.
Hmmmm.
Oh, don't YOU start it now!
You lefties are not perceptive enough to recognize that UBI only has the potential for an ultra-short, one-shot effect on the economy. Ask the Zimbabweans or the Venezuelans how well currency inflation (creating new money out of thin air) does at solving their economic problems (no food, no toilet paper, no medicine, etc.) What solves those kind of problems is UBP (Universal Basic PRODUCTION), not UBI!
Don
Actually those systems (usually lumped under the heading of "helicopter money" among economists) could work fine (depending somewhat on your definition of 'fine'), were they to be financed by an equivalent amount of new taxation. But you know how likely that is.
Yea, we have tried that, again and again and again..
It never seems to work because it is ONLY you and I that shoulder the burden..
What a load of unmitigated bullshit. It's all Michale. I have been here off and on since the beginning. I think I first posted a month or so after Michale. I have seen many commenters come and go and the pattern is quite consistent. Very few come to this board uncivil. It's only after being pushed by Michale's incessant bullshit that they become so. As long as Michale sticks to his twisted game, nothing will ever change.
There was a change that accelerated the problem, when Michale stopped using paragraphs, went to the stream of consciousness sentences and grossly increased his copy and paste spam.
In researching whether or not Michale ever commented on the 2009 swine flu (ya, I generally don't make accusations without at least a little research) I encountered a bunch of LewDan posts. What a loss for this board. I did not always agree but he had an interesting perspective (and could write in actual paragraphs). I think the same can be said for many of the commenters that have left because they just can't take the troll any longer.
Don't believe me? Go read some early comment threads. Michale was not always a troll but woo boy has he become one.
Personally, given the choice, I will always take a bit of profanity over incessant copy and paste spam. I suspect most the commenters here past and present would agree...
1,314 and counting...
Bashi,
Very few come to this board uncivil. It's only after being pushed by Michale's incessant bullshit that they become so. As long as Michale sticks to his twisted game, nothing will ever change.
So, you have the same problem as Michale, then. Which means there is less hope for this place than imagined.
What are you keeping track of at the bottom there?
Hey, Don … how's it going?
Ignorance is bliss - the less you know the better!
Oh … Biden is doing a CNN town hall tonight … ICYMI
So, you have the same problem as Michale, then. Which means there is less hope for this place than imagined.
How so? Have you considered this place has never been what you wanted and the problem is with your unrealistic expectations? I have been fairly consistent with my language and argument style since the "good old days". I would bet my use of the word bullshit in responding to Michale pre-dates your first post here by a wide margin.
The counter is the US death count from COVID-19.
Bashi,
Why can't you just ignore Michale. Why do you have to succumb to his antics and bait?
That doesn't seem to me to be an unrealistic request - I do it all the time, for crissakes!
Liz,
I signed up to this comment section shortly after it opened specifically to argue with Michale. It used to be quite fun back in the days I had more time and he had not started his decline and could still write in paragraphs and back up his arguments. It still is from time to time, especially when I have an abundance of time like being sheltered in place. I generally read Chris's article and skim the comments. But frankly Michale is not wrong when he accuses everyone here of being a bit of left hive mind and I just don't find that compelling (Michale, don't let this comment go to your head :-)
Your idea of what a comment section should be and my idea seems to be quite different...
1,442 and counting...
Your idea of what a comment section should be and my idea seems to be quite different...
I don't know why you would say that.
I think we both would like the comments sections here to be a fun place to debate, discuss, enlighten based on the headlining pieces, without care of political bent and with a lot of respect.
I think it's entirely possible to get back to that place.
That is certainly one of the things that make this place welcome for everyone, left/center/right/up-wing/down-wing ...well, ah, we don't really want any more down-wingers around here, let's be perfectly clear about that!
Bashi,
Do you have any comment sites that you would recommend? I started reading CW when I discovered HuffPost’s original comments section (before they sold out to Facebook). I also enjoyed the Atlantic’s comments section before they decided to get rid of it completely.
I have enjoyed CW’s comments section over the years, but it has gotten worse since Michale became a Trumpcumdump. It is not all that surprising, since it is next to impossible to defend Trump’s actions in a logical manner. Michale is stuck just posting dishonest defenses of Trump’s dishonesty...you can’t honestly defend lies, after all. It would be different if he actually believed his own arguments, but he’s made it clear that he is only here to attack others for their comments — not to discuss the actual merits of what is being discussed.
Glad to see you are still around.
Russ,
That's a great question! I hope you don't mind my quasi-answer...
While no blog can compare to Chris's pieces, I have come across one with a comments sections that abides by these rules"
All people of good will and thoughtful disposition are welcome here.
Within the confines of time and normal human commitments, an effort will be made to respond to at least a few comments and questions. But those same confines will prevent extended dialogues or even short exchanges with more than a few. I apologize for these realities.
It is my hope to keep most of my observations to somewhere between 100 and 300 words, though the philosophical, perhaps ponderous, nature of topics selected will make this difficult. Therefore, responses that begin “I notice you didn’t mention….” will be duly noted but already precluded. Let’s all agree that every comment by me or others will necessarily leave a few things out.
The blog world has become accustomed to the participation of those for whom anonymity provides courage, that is those who find the blog an instrument of vituperation, anger, and bitter ad hominem revenge on the world. No one has yet devised a proper method of shunting anger into a more productive project. For those who are bitter, we must have sympathy but no respect.
The blog to which I refer cannot be named here - for obvious reasons. Though, this moderated blog (by the host alone) can, at times, be so overly polite that serious back-and-forth debate rarely occurs. But, when it does, it is a wonderful thing.
Well, just to be clear, down-wing has nothing to do with height. :)
No, down-wing isn't about that, either.
Nader is popular enough to do this. It only requires him to get 5-10% of the vote in order to pull off this blackmail.
The people that would vote for current Biden are not likely to abandon him if he makes the small donor only commitment because they want to beat Trump. Making the commitment could add 5-10% of the vote to what the current Biden would get which would increase Biden's chances of beating Trump.
So Nader is not actually running? He’d only say that he was running in the hopes of getting Biden to become a small donor only candidate to keep him from being a 3rd Party spoiler...even though Nader has no real interest in running, right? If Nader is doing this to get Trump out of the White House, then it makes no sense that he would stay in the race if Biden refuses to be blackmailed. Nader would be helping Trump if he stayed in the race, so why would he do that?
And you are claiming that the 5 to 10% that vote for Nader are non-voters that will suddenly decide to get involved in politics, correct? That would be the only way that Biden would gain 5 - 10% more votes as you are promising. Where are you getting your stats —that Nader could pull 5 to 10% of the vote if he ran on a spoiler platform? Oh wait, this is a “it COULD” happen argument - One that you use despite the fact that Nader doing this COULD just as easily result in the moderates in the Dem Party turning on liberals for such dirty tactics and deciding to write their own names in on their ballots in protest...letting Trump win easily.
I was visiting One Demand’s site again and I was struck by your claim that the Tea Party was a grass roots movement and your saying that you believed One Demand could be even more successful than they had been. Only problem is that the Tea Party was never truly a grass roots campaign. It was a corporately funded movement that disguised itself to look like it was “grass roots”...It was all a lie.
ListenWhenYouHear-
I have not had much time for forums lately. I occasionally post on Hacker News. Great site. The spiritual successor to Slashdot, which was one of the first news with comments site. Very heavily moderated by users and politics are frowned upon. Aside from the lack of politics, Liz would love it. It's by far the most polite forum I have encountered on the internet. Cool moderation system. As your post gets down voted it blends in to the background to the point it becomes invisible. It's all tech, science and programing but very smart contributors. Read a thread and sometimes the the person who invented/wrote/discovered what is being discussed pops on to comment.
Otherwise, Reddit can be good if you find a good sub-reddit. The general pages like news or politics are just too commented on. By the time you read the story, there will hundreds or thousands of comments and your post just disappears in the noise. Sub-reddits can have good groups of commenters and thoughtful moderation but finding the good ones can be tricky. I mainly use it for discussing the latest video game I am playing, but every subject under the sun is there somewhere if you can find it. Just stay away from /the_donald. Makes Michale seem down right civilized...
Just to be clear, I was COMPLAINING about the site I was referring to being TOO POLITE.
My concerns about the comments sections here have little to do with politeness.
Elizabeth Miller
66
Why can't you just ignore Michale. Why do you have to succumb to his antics and bait?
Why can't you just ignore everybody else?
I'm not going to mince words here when I tell you that your repeated trolling of everyone else on the comments board imploring them to ignore the troll are effing ridiculous.
That doesn't seem to me to be an unrealistic request - I do it all the time, for crissakes!
Great! Then kindly apply that self-professed awesome skill set of yours to everyone else here. Seriously.
Why are you commenting on an old thread?
Elizabeth Miller
85
Why are you commenting on an old thread?
Because the author hasn't posted:
Until he does, I'll assume he's okay with people commenting on yesterday's thread. I cannot fathom why anyone not named Chris Weigant would take it upon themselves to close threads for him.
So to recap: "Why can't you just ignore" me? "Why do you have to succumb to" your need to control?
"That doesn't seem to me to be an unrealistic request -" you "do it all the time, for crissakes!"
Sorry, Kick … I'm just paying it forward, so to speak. :)
Why can't we be friends?
I mean, obviously, we both can't sleep … so ...
Have you heard anything from Biden, lately?
I've heard that some journos have their knickers in knots over Biden still getting a little emotional when talking about the Covid-19 deaths and that it means he can't possibly be a good president because of it.
I think that's just crazy but typical of the US media, in general.
We'll have to pick this up in a current thread but, for now, over and out ...
Mopshell,
I don't think we have too much to worry about with regard to Michale.
He's probably just taking one of his breaks away from this place. Can't say that I blame him.
And, I'm pretty sure that Chris would keep us informed.
Yikes!