Choose Your Own Narrative, Jobless Claims Edition

400,000 Americans filed for unemployment benefits last week, more than expected.

It was the second consecutive week that initial claims were 400,000 or more.

The previous week’s total was revised higher to 424,000. It was already the highest since May.

The four-week moving average rose slightly to 394,500.

While nothing to write home about (so to speak), the latest claims data was incremental evidence to support the contention that labor market frictions persist. Not exactly a revelation, but as the figure (above) clearly shows, momentum stalled early last month.

The figure (below) is another simple way to visualize the situation. Whether claims will rise of fall from week to week is now just a coin toss.

Continuing claims were 3.269 million for the week ended July 17. That too was more than expected.

Pandemic Unemployment Assistance claims fell, while ongoing PUA and PEUC claims rose to 5,246,162 and 4,233,883, respectively, for the week ended July 10.

So, 12.7 million people are still receiving some kind of benefits.

Optimists can take comfort in the unadjusted figures, which dropped to a post-pandemic low. That supports the “ongoing healing” narrative for the labor market. Bloomberg flagged “seasonal quirks.” But, as noted above, there’s a very plausible “losing momentum” narrative too. Choose your own adventure.

Either way, there’s no question that things are nowhere near “normal” or “fixed” or whatever adjective you prefer when it comes to describing what the economy looks like when hundreds of thousands of people are just “regularly” out of work, as opposed to out of work because a deadly virus swept the globe leaving untold human suffering and economic devastation in its wake.

What would be nice, is if the richest nation in human history would consider a federal jobs guarantee. That’s a Pandora’s box from a debate perspective, but whatever side of that argument you fall on, it would settle one thing: If it were everywhere and always possible to get a job that guaranteed a wage and benefits sufficient for people to live with dignity, we could determine, definitively, who’s actually “lazy” and who’s just sick and tired of being exploited by capitalism run amok.

Maybe that’s why Republicans and centrist Democrats will never support it. They might discover that, in fact, most people at the bottom of the social hierarchy aren’t lazy. Give them $50,000, healthcare and some kind of retirement plan, and they’ll be more than happy to get up at 7 every morning and work until 4:30 doing pretty much whatever you want them to do. But that would undermine a lot of narratives, so it’s a non-starter.


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4 thoughts on “Choose Your Own Narrative, Jobless Claims Edition

  1. Considering that the Fed knows much of the data, directly or via proxies, before the market does, one can see why Powell is trying to stick to his guns.

    UE remains high, new UE stalled, GDP undershooting, prices either easing or lifted by factors unlikely to be alleviated by Fed action, major withdrawal of fiscal stimulus about to begin, uncertain fate of future fiscal stimulus proposals, and another Covid surge is underway.

    To start putting away the tools right now would seem, well, unpragmatic.

  2. Between Delta and the fact that the economy was shut down and is completely rebooting and still is in shock, none of the metrics you are seeing are “clean”.
    There is a really good shot that the 3rd quarter will provide some clarity. At that point vaccination rates should be higher, Delta should be factored in, extended unemployment will be wound down, the kiddos will be back in school (fingers crossed), and we should have a pretty clear idea on whatever economic packages Congress and the President will enact. My two cents- the economy will continue to improve but there will still be some dislocations and pockets of difficulty. The pockets will be by geography, industry, and will vary by demographic groups too. Wall Street will not be satisfied with this narrative, and financial markets should see higher volatility as a result. This is a likely result overseas as well.

  3. We see, now, top Republicans urging the unvaccinated to get the shot. It must have dawned on somebody high up in the GOP that a high number of the unvaccinated deaths are Republican and won’t be showing up to vote at the next election. Glad to see them getting the shot. About time.

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