The number of new claims for unemployment for week ending 11/7/20 again declined. This is the fourth weekly decline, with drops in eight of the last fifteen weeks. New claims are 709K, a 48K drop for the week.
Starting 8/29/20 the new claims have been in the mid- to high 800 thousands. Since 10/17/20 the new claims have been under 800K.
Remember that before the government induced shutdown of the economy the new claims averaged about 220K per week so we are still running more than three times the previous norm.
The number of continuing claims for unemployment is continuing to drop. Large part of the drop is people going back to work. Part of it is people dropping off the state-level unemployment rolls exhausting coverage.
On 11/12/20, the Wall Street Journal reported U.S. Unemployment Claims Slip but Hold at High Levels. Article asserts the declining new claims and drop in ongoing claims indicates the economy is in a good recovery. Consensus of economists spoken to for the article indicate economy is on a better tract recovery now then the expectations were a few months ago. Current expectation is the GDP will drop 2.7% for the year which is better than the 3.6% expected just last month.
Article suggests that recovery is better than expected.
Tally of people who are now in the extended 13 weeks covered at the federal level is rising rapidly. Here is a recap:
Every day there are fresh reports of the devastating impact from the shutdown of the economy. Damage is widespread. Impact is growing.
Just a few of the recent articles:
Early screening for cancer slowed down earlier, resulting in more serious cancers discovered now
People showing up for treatment have more advanced cancer
Wave of tenant evictions is on the horizon
State government budgets are collapsing
Freshman enrollment at colleges is down 16%
There is a severe cost to be paid from early mistakes and ongoing mistakes by a wide range of government officials.
Devastating impact from more serious cancers
10/15/20 – Wall Street Journal – Covid-19 Outbreaks Led to Dangerous Delay in Cancer Diagnoses – The closing of many health facilities meant regular screenings for cancer were not available for several months this past spring. Next, widespread panic kept people away from doctors’ offices. One insurance company reports the number of daily screenings for colorectal cancer dropped between 50% and 80% for about three months.
Only at the end of August was the number of screenings back to the normal amount compared to prior years.
The expected result?
A cancer care provider reports an increased number of patients are arriving with advanced stages of cancer.
Economic damage from the shutdown is becoming more obvious as more reporters spend time covering the destruction. Here are two articles each on the overall economic impact, specific impact on individuals, and concentrated impact on two cities:
GDP in Italy expected to shrink to the level it was 23 years ago
Airline CEOs expect it will take years for the airlines to recover
Additional 8 million Americans drop below the poverty level, joining the 55 million who were there before the pandemic
All 1,600 orchestras in the country have gone dark; their 160K musicians are unemployed
San Francisco has 14% vacancy rate in commercial office space
Impact on employment in New York City is more severe than the national average
The number of new claims for unemployment for week ending 10/10/20 increased, which offset net declines of the preceding five weeks. New claims are 898K, a 53K increase over the revised tally for previous week of 845K.
Since 8/29/20 the new claims have been in the mid- to high 800 thousands. Change in the last six weeks, starting with 9/5/20 are +9K, -27K, +7K, -24K, -4K, +53K.
Keep in mind before the government induced shutdown of the economy new claims averaged about 220K per week so we are still running about four times the previous norm.
The number of continuing claims for unemployment is continuing to drop. I’m not sure why this is. Part is due to people going back to work. Part of it is people dropping off the state-level unemployment rolls after the 13 weeks of coverage.
Summarized below are a few of the recent articles pointing to expanding economic damage from the shutdown. Destruction in the movie business is noticeable in recent days:
Second largest movie chain in the US closes all its theaters
Wonder Woman director worried the entire theater industry may die
Disney restructures in order to increase focus toward direct-to-consumer distribution channel and away from theatrical release
Sales tax collections in San Francisco collapse
Passenger cruise ships are getting scrapped
10/5/20 – Wall Street Journal – Regal Cinemas Suspending Operations at All US Locations– The chain with the second largest number of theaters in the U.S. has closed all of its US theaters after having reopened only two months ago. Article does not indicate when any of the theaters will be reopened.
Article says release dates for a dozen movies have been postponed.
The number of new claims for unemployment for week ending 10/3/20 continues to decline a bit. Since 8/29/20 the new claims have been in the mid- to high 800 thousands. Change in the last five weeks, starting with 9/5/20 are +9K, -27K, +7K, -24K, -9K.
To again put this in context, before the government induced shutdown of the economy new claims averaged about 220K per week.
The number of continuing claims for unemployment is continuing to drop. I’m not sure why this is. Part is due to people going back to work.
One of the frustrations I have experienced as an auditor is the statistical information made visible by the AICPA and publications from others is that the economic data mentioned routinely lags behind two or three quarters on the date it is published. Another trade association reports giving trends in the religious communities, but the survey information is provided late in the year for the prior calendar year.
The result is when I’m working on an audit or review several months later, the readily available economic data is from the start of the fiscal year I’m analyzing. Sometimes the data is for the prior fiscal year I’m considering. That doesn’t do me much good.
Long time ago I came across a comment that CPAs ought to start tracking key economic indicators on their own.
Enough time has passed that there is enough information to start analyzing the lockdowns. Preliminary info is not pretty. Image courtesy of Adobe Stock.
Indications are starting to emerge that the answer to the question may actually be no.
Previously mentioned one analysis which found a weak statistical correlation between weaker lockdown requirements and lower infection rate. The study found no correlation between the date that states started releasing the lockdown restrictions and subsequent infection rates.
The rate of infections accelerates rapidly and then hits an inflection point where the rate of infections either plateaus or the rate slows dramatically.
The following study suggests the lockdowns have no correlation to when the infection rates hit that transition point. In fact, the inflection point normally is reached before the lockdowns could have had any impact.
The number of new claims for unemployment for week ending 9/26/20 has been about the same over the last five weeks, in the mid- to high 800 thousands. Last big drop was the week of 8/29/20. To again put this in context, before the government induced shutdown of the economy new claims averaged about 220,000 per week.
Good news is the number of continuing claims for unemployment is continuing to drop, which means that more people are going back to work than loosing their job.
The devastating impact of the economic shutdown continues to be painfully obvious.
Starting this week that way the information is presented for this ongoing analysis will be in graphs.
We have been locked down long enough for the volume of statistics to build up to the point of allowing deeper analysis. As is always the case, the statistics can also be manipulated to give whatever answer you want. Deeper, honest analysis is starting to show surprising results, for example, the lack of correlation between infection rates and lockdown policies.
Surprising results on the low correlation will be mentioned after some game playing is described.
The annual motorcycle rally in Sturgis, South Dakota routinely draws huge numbers of people to the town, whose population is only 7,000 people. Attendance at the 10-day event this year was lower than usual with an estimated 460,000 motorcycle enthusiasts hanging around.
Frightening news reports at the time said this would cause massive numbers of Covid infections leading to massive numbers of deaths.
The number of new claims for unemployment for week ending 9/12/20 dropped a little, with “only” 860,000 people losing their jobs, down from an upwardly revised 893,000 the previous week. For contrast, before the government induced shutdown of the economy new claims averaged about 220,000 per week.
Better news in the data is the number of continuing claims for unemployment dropped about twice as much as the new claims, to 12.6M for the week ending 9/5/20. That is the lowest since the shutdown started.
As I continue to sort out for myself what this means, will continue listing the stats I’m tracking.
The number of new claims for unemployment and number drawing unemployment is provided by Department of Labor. I calculated the net change, which I assume represents the number of new jobs, although it could also be that people dropping out of the job market wash into the new jobs number: