Millions Out of Work: Weekly Jobless Claims Soar Amid Pandemic

By jlsloe | March 26, 2020 - 10:24 pm |March 26, 2020 Uncategorized

Millions Out of Work: Weekly Jobless Claims Soar Amid Pandemic

More than 3 million Americans file for unemployment as the coronavirus pandemic brings the economy to an unprecedented standstill.

M. COREY GOLDMAN • UPDATED:MAR 26, 2020 9:49 AM EDT • ORIGINAL:MAR 26, 2020

Image © courtesy of abc12.com

More than 3.3 million Americans are out of work and have filed for jobless claims, an unheard of number never before recorded in the United States, as the onslaught of the deadly coronavirus brings the U.S. economy to an unprecedented standstill.

The U.S. Labor Department reported on Thursday that jobless claims for the week ended March 21 tallied 3.283 million, an astronomical number considering the working population of the United States.

Economists surveyed by Econoday had expected 1 million jobless claims for a week that saw wide shutdowns in recreation, food services and manufacturing because of the coronavirus outbreak. The last record weekly number was 695,000 set in 1982.

"Depression economy needed Depression response," David Rosenberg, chief economist of Rosenberg Research, wrote on Twitter, noting in awe that the number was even higher than Goldman Sachs's dire 2-million-plus prediction.

Goldman Sachs economist David Choi a week ago said he saw initial claims for the week ended March 21 jumping to a seasonally adjusted 2.25 million.

Jobless claims the week prior numbered 281,000. Forecasts in a Reuters poll ranged from 250,000 claims up to 4 million for the week.

Jobless claims across the U.S. soared as the coronavirus pandemic prompted widespread shutdowns of commerce and industry, and layoffs with it, but it's going to get significantly worse, economists say.

Until March, U.S. employers had added jobs for a record 113 straight months, causing payrolls to grow by 22 million, pushing the jobless rate to 3.5% in February, a near-record level not seen since the 1960s.

The largest increases in initial claims for the week ending March 14 were in California (+14,221), Washington (+7,624), Nevada (+4,047), Pennsylvania (+3,212), and Massachusetts (+2,737), while the largest decreases were in Arkansas (-461), Alabama (-341), Puerto Rico (-171), West Virginia (-168), and Maine (-81), the Labor Department said.

The surreal numbers follow the Trump administration's ask that states hold back from releasing their own unemployment-claims figures prior to the publication of the national numbers each Thursday – a move meant to keep the headline-grabbing numbers contained for now.

They also come ahead of the U.S. government's record $2.2 trillion stimulus plan to give American families and businesses a financial shield against the ravages of the coronavirus pandemic.

"The real question at hand now is if the current stimulus package is enough to give Americans the support they need," said Mike Loewengart, Managing Director, Investment Strategy with E*TRADE Financial.

"This environment is no doubt taking a toll on the consumer, a critical driver of economic health, and crunching profitability of small and big businesses alike."

The original article written by M. Corey Goldman and posted on thestreet.com.

Article reposted on Markethive by Jeffrey Sloe

Federal Reserve Leaves Rates Unchanged After Three Straight Cuts

By jlsloe | December 12, 2019 - 2:58 am |December 12, 2019 Uncategorized

Federal Reserve Leaves Rates Unchanged After Three Straight Cuts

By RTTNews Staff Writer | Published: 12/11/2019 2:22 PM ET

After three consecutive interest rate cuts, the Federal Reserve on Wednesday announced its widely expected decision to leave rates unchanged.

The Fed said its Federal Open Market Committee decided to maintain the target range for the federal funds rate at 1-1/2 to 1-3/4 percent on the heels of three straight quarter-point reductions.

The FOMC judged that the current stance of monetary policy is appropriate to support a sustained economic expansion, strong labor market conditions, and inflation near its symmetric 2 percent objective.

The central bank maintained its assessment of the economy, reiterating that recent data indicates the labor market remains strong and that economic activity has been rising at a moderate rate.

The Fed also once again noted that while household spending has been rising at a strong pace, business fixed investment and exports remain weak.

The FOMC noted it will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path for rates.

The vote to leave interest rates was unanimous, as Kansas City Fed President Esther George and Boston Fed President Eric Rosengren joined in after voting against the past three rate cuts.

Economic projections provided by the Fed along with the decision show a majority of FOMC participants expect interest rates to remain unchanged throughout 2020.

The projections for GDP growth in 2019 and the coming years were unchanged from September, while the unemployment rate is expected to come in slightly lower than previously forecast.

The Fed downwardly revised its forecast for core consumer price growth in 2019 to 1.6 percent from 1.8 percent, although the inflation estimates for the next three years were unchanged.

In his post-meeting press conference, Fed Chairman Jerome Powell suggested he would not consider raising rates until inflation picks up significantly.

"In order to move rates up, I would want to see inflation that's persistent and that's significant," Powell said. "A significant move up in inflation that's also persistent before raising rates to address inflation concerns. That's my view."

However, Powell noted his comments do reflect "official forward guidance," adding, "It happens to be my view that that's what it would take to want to move interest rates up in order to deal with inflation."

Looking ahead, the Fed's first monetary policy meeting of 2020 is scheduled for January 28th and 29th, with rates widely expected to remain on hold.

CME Group's FedWatch Tool currently indicates a 91.4 percent chance that the Fed will leave rates unchanged at the January meeting.

For comments and feedback contact: editorial@rttnews.com

Article written by an RTT News Staff Writer, and posted on the RTT News.com website.

Article reposted on Markethive by Jeffrey Sloe

Free Money Didn’t Help People Find Jobs Finland Says

By jlsloe | February 12, 2019 - 2:11 pm |February 12, 2019 Uncategorized

Free Money Didn’t Help People Find Jobs, Finland Says

By Kati Pohjanpalo
February 8, 2019, 1:47 AM EST Updated on February 8, 2019, 4:24 AM EST

Distributing free money to the unemployed improves their well-being, but doesn’t appear to have any significant impact on their job prospects.

That’s according to the preliminary results of a landmark experiment in Finland, the first country in the world to trial a basic income at a national level.

The Nordic social welfare champion spent the last two years handing out 560 euros ($635) per month to a randomly selected group of 2,000 jobless people aged between 25 and 58. The basic aim was to explore new ways of distributing social security in a world where more workers are threatened by automation and fewer are likely to take on traditional nine-to-five jobs. The current system is seen as too bureaucratic and often dissuades people from taking on temporary or part-time work.

According to a preliminary assessment published on Friday by the social services agency Kela, the recipients of the monthly stipend spent on average about half a day more in employment per year than the control group.

“On the basis of an analysis of register data on an annual level, we can say that during the first year of the experiment the recipients of a basic income were no better or worse than the control group at finding employment in the open labor market,” said Ohto Kanninen, Research Coordinator at the Labour Institute for Economic Research.

The recipients did however report “less stress symptoms as well as less difficulties to concentrate and less health problems than the control group,” said Minna Ylikanno, lead researcher at Kela. “They were also more confident in their future and in their ability to influence societal issues.”

Feeling Better

Self-perceived assessment of own state of health was better among recipients

Old Debate

Kela’s results are set to add fodder to a debate that’s been intriguing political philosophers and economists for centuries: What happens when citizens are given money with no strings attached?

Against the background of a global discussion on how to deal with rising inequality, the pilot project has attracted international attention and is being closely watched by economists, sociologists and billionaires including Mark Zuckerberg and Elon Musk.

The idea of a basic income as a replacement for means-tested welfare payments has its share of supporters on both the left and the right of the political spectrum. Advocates say it eliminates poverty traps and redistributes income while empowering the individual and reducing paperwork. The concept has inspired Italy’s populist government, which this week started honoring its election promise of a “citizen’s income” for the poor.

Useful Data

With its road-testing of a basic income, the government wanted to find out whether a basic income could simplify the social security system, eliminate excessive bureaucracy and remove incentive traps. Researchers at Kela also wanted to measure its impact on the participants’ physical and psychological well-being.

Olli Karkkainen, an economist at Nordea Bank Abp, found the results surprising.

“I had expected the basic income experiment to have a greater positive impact on employment because incentives for work were boosted so significantly,” he said in an interview.

Pirkko Mattila, Finland’s minister of social affairs and health, said that despite its success in providing useful data, “the basic income model developed for the experiment is not likely to be adopted as such for more extensive use.”

According to some estimates, a nationwide basic income would add around 5 percentage points to Finland’s public deficit relative to gross domestic product.

Friday’s preliminary results only looked at the first year and focused on statistical data, with a final report not due until 2020.

— With assistance by Leo Laikola, and Brad Cook

Original article posted on Bloomberg.com and written by Kati Pohjanpalo

Posted on Markethive by Jeffrey Sloe