Ongoing hypocrisy from our ruling overlords. Oh, guess who finally wants to reopen the economy?

Image courtesy of Adobe Stock.

Feel free to laugh. Or cry if you wish. Two more politicians demonstrate they are exempt from the rules they require us lowly, common peasants to follow.

Also, two politicians realize it, um, maybe, possibly, is time to get the economy started. Oh yeah, that is in spite of infection rate spike in New York State.

Today’s source of entertainment which would be funny if the human impact from the lockdowns had not been so devastating for the last 10 months:

  • County manager in North Carolina announces she intends to ignore travel restrictions
  • It is perfectly okay for Mayor DeBlasio to have a private dance in Times Square on New Year’s Eve even as everyone else is required to stay home
  • Chicago mayor wants to reopen bars and restaurants even though the relevant statistics show it the city is a long from otherwise being able to reopen
  • New York Gov. realizes there may not be much left of the economy if we don’t open up quickly.

12/23/20 – Red State – NC Official Says She Will Travel For Christmas After Telling Residents To Stay Home. Her Justification Is Priceless – Behold the power of rationalization.

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Large rise new claims for unemployment for week ending 1/9/21.

The number of new claims for unemployment for week ending 1/9/21 increased to 965,000, a deterioration of 181,000 from the prior week.  That is the highest number of new state claims since 8/22/20.

Since 8/29/20, the new weekly claims have been in the 700Ks or 800Ks.

Keep in mind that before the shutdown of the economy the new claims averaged about 220K per week, so we are now running more than four times the previous norm.

The number of continuing claims for unemployment has been slowly dropping but increased for the week ending 1/2/21.

News report

Article at Wall Street Journal on 1/14/21 reports US Unemployment Claims Rise as Pandemic Weighs on Economy. Article link indicates the consensus is the increasing virus count combined with increasing restrictions on businesses caused the jump in new unemployment claims.

Article says there are other economic indicators suggesting the economy is slowing down again. Stats such as small business optimism, new home sales, existing home sales, household income, and household spending point towards a slowdown.

Following graphs show the devastation from the economic shutdown.

New claims

New claims for unemployment by week since the start of 2020:

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One more post on the utter devastation from shutdown of the economy.

When done to a 60 year old building that destruction is understandable. When done to an economy, not so much. Image courtesy of Adobe Stock.

The government ordered shutdown of the economy in 2020 has devastated primary education, secondary education, higher education, travel industry, entertainment industry, small businesses, restaurants, physical health, mental health, and detective/ preventive treatment of chronic and deadly disease. Level of unemployment is second only to the Great Depression. We have seen evaporation of wealth, savings, trust in government officials at all levels, and trust in every public health official in the country.

I have over 100 posts protesting the foolishness and destruction this year with those posts containing close to 90,000 words describing the devastation.

This will be the last routine post describing the intentional disruption we have suffered this year. I will have one more post describing actual science that is surfacing, which is in sharp contrast to the alleged “science” that has driven the demolition of the country.

Discussion in this post:

  • Devastation in travel industry
  • Drastic increase in U.S. poverty rate
  • Collapse of incoming freshman class at U.S. colleges

Indicators of the devastation in the travel industry

11/4/20 – Wall Street Journal – How Coronavirus Ravaged Travel in 2020 – The Middle Seat column tabulated a number of indicators showing the illness across entire travel industry.

What does the collapse of an entire industry look like? A few stats:

Traffic at three largest New York airports:

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Small decline in new claims and continuing claims for unemployment for week ending 12/26/20.

The number of new claims for unemployment for week ending 12/26/20 declined for a secone weeks in a row. New claims are 787K, a 19K drop for the week.

This two week drop follows two weeks of increases, which totaled 176K.

Since 8/9/20, the new weekly claims have been in the 700Ks or 800Ks.

For contrast, remember that before the government induced shutdown of the economy the new claims averaged about 220K per week so we are still running three or four 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. Some portion, likely a lot, of the drop in state-level continuing claims has been offset by rising number of people on the federal program.

When a person exhausts the state level coverage, they become eligible for the extended federal benefits, called the Pandemic Emergency Unemployment Compensation program.

Article at Wall Street Journal on 12/31/20 reports US Unemployment Claims Fell Modestly Last Week.  Article explains the new claims for state programs is a proxy for layoffs. Good observation.

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New claims and continuing claims for unemployment increased for week ending 12/5/20.

The number of new claims for unemployment for week ending 12/5/20 increased from 716K in prior week to 853K.

Number of new claims has been in the 700Ks or 800Ks since the end of August.

The number of continuing claims for unemployment increased for the week ending 11/28/20, going from 5.53M up to 5.76M.

Just a few graphs this week:

New claims

New claims for unemployment by week since the start of the year:

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“An Ulvog Journey” – Tales of growing up on a South Dakota farm in the 1930s and 1940s.

Casting my CPA eye on the 1946 probate document for my grandfather’s estate led to a series of posts on my other blog describing what we can learn about farming in the 1940s from a legal filing.  Those posts have been combined into one section of my newest book: An Ulvog Journey.

The book also provides recollections of growing up a South Dakota farm in the 1930s and 1940s, written by my dad and his seven siblings.

One of my uncles, Carl Ulvog, was a captivating storyteller. His autobiographic tale of experiences in the South Pacific during World War II are also included.

Description from back page of the book:

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New claims for unemployment continue slow decline for week ending 11/7/20; continuing claims dropping quickly.

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:

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Devastating impact from shutdown visible in higher education, cancer treatment, pending evictions, and state government finances.

Image courtesy of Adobe Stock.

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.

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Economic destruction from the shutdown is expanding.

Image courtesy of Adobe Stock.

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

How long will we let this go on?

 

Broad indication of the damage:

10/11/20 – India Today – Italy’s GDP in 2022 shrink back to the same level as 23 years ago: Report(more…)

New claims for unemployment rise for week of 10/10/20.

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.

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Economic damage from shutdown continues to spread.

Image courtesy of Adobe Stock.

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.

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New claims for unemployment again drop slightly for week of 10/3/20 (corrected from 10/8).

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.

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Why I talk about economic indicators so often.

 
Image courtesy of Adobe Stock.

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.

What a great idea!

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Did the lockdowns have any beneficial impact on the rate of new infections?

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.

10/4/20 – National Review – Stats Hold a Surprise: Lockdowns May Have Had Little Effect on Covid-19 Spread

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Headline unemployment rate drops another half percent in September 2020.

The unemployment rate dropped from 8.4% in August 2020 to 7.9% in September.

Amongst the extremes we are seeing during the shutdown, that 0.5% drop is the smallest monthly decline since the peak in April.

(Cross post from my other blog, Attestation Update.)

Check out the extreme swings in the U-3 unemployment rate over the last 7 months:

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