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The
Emergency Unemployment Compensation (EUC)
program began in June 30,2008. Benefits under
the act have now been extended twice. Unless Obama extends the program a
third time, it's the end of the line for many receiving unemployment
benefits.
Please consider First wave of
jobless exhaust unemployment benefits.
Thousands
of jobless Pennsylvanians are joining the growing ranks of people around the
country who are exhausting unemployment benefits, as some experts worry about
another blow to a stumbling economy.
Gov. Ed Rendell said 17,800 Pennsylvanians exhausted their jobless benefits
in the week that ended Saturday, the first big wave of Pennsylvanians to do
so. He urged legislators to pass a bill to extend the benefits.
Around the country, the number of people
exhausting their benefits is piling up. By the end of September, more than
500,000 people will exhaust their benefits checks, with the biggest groups in
Pennsylvania, California and Texas, according to estimates by the National
Employment Law Project, an advocacy group for low-wage workers based in New
York City. That number will nearly triple by the end of the year, the group
said.
New
York Qualifies For Extended Benefits
As some states exhaust extended benefits other now qualify. In New York, Benefits Extended
As State Unemployment Numbers Rise.
The
number of jobless New Yorkers across the state jumped significantly during
the month of June, according to state Department of Labor statistics released
Thursday.
The unemployment rate increased from 8.2 percent in May to 8.7 percent in
June. That's the highest level since October of 1992.
In New York City, the rate increased from nine percent in May to 9.5 percent
in June -- the highest level in more than a decade. That translates into more
than 850,000 people out of work in the state.
"Because of our 8.7 percent unemployment rate, we will qualify for an
additional seven weeks of unemployment insurance benefits," said New
York State Labor Commissioner M. Patricia Smith. "So right now New
Yorkers will be eligible for 79 weeks of unemployment insurance
benefits."
Unemployment benefit extensions are expected to help an additional 47,000
jobless New Yorkers who would have lost their benefits in August.
79
Weeks is a long time to be without a job. Yet it's happening in mass.
President Obama claims he will save 3.5 million jobs. When? Who gets to
count? The reality is no one is counting and the number is fabricated. It is
impossible to count "saved jobs" so Obama can pick any number he
wishes.
How did Obama arrive at 3.5 million? Simple - It was the largest number he
thought he could get away with.
Meanwhile bear in mind that the continuing claims number does not include
those on EUC. I posted several charts of EUC in Unemployment
Claims: How Bad are the "Real" Numbers? to
show what the real continuing claims number is.
Here is one of the charts.
Continuing Claims + EUC Extended Benefits from 2000-2009
click on chart for sharper image
Note the dips in the EUC numbers and the corresponding dips in the total numbers.
Compare to double extensions in emergency benefits:
"The original extension passed in July 2008 paid up to 13 weeks of
additional benefits. Effective November 23, 2008, we can pay up to 7
additional weeks of benefits. Effective December 7, 2008, we can pay up to
another 13 weeks of benefits."
The above chart was from July 10th. New Weekly Unemployment Claims
figures came out on July 16.
Note the huge drop in continuing claims and the 4-week moving average of
continuing claims. Two factors account for the drop.
1) Extended benefits expiring
2) A huge seasonal adjustment factor beyond the ordinary related to auto
manufacturing plant shutdowns skewed the seasonally adjusted numbers.
The key point now is the number of people whose benefits have expired or are
about to, and those people will not show up at all in the above weekly
unemployment releases.
Unemployment Insurance Exhaustion Rate
Dave Rosenberg has an interesting chart of expiring benefits in Breakfast with Dave on
July 17.
The
Bureau of Labor Statistics said that the move in claims has nothing to do
with any improvement in the economy. I think this is all about the fact that
with GM and Chrysler in bankruptcy and all the permanent shuttering of plants
and workers, there are fewer of these employees left that go though the
normal seasonal shutdowns. So, fewer seasonal layoffs in the auto sector, I
firmly believe, are behind these recent declines in initial jobless claims.
We will know if this thesis is correct in a few weeks. (Also keep in mind
that the shutdowns happened in June this year, not July, as is normal, and
hence this is giving a skew downward to the claims data. To reiterate, these
numbers are telling us nothing about the economy.)
Claims dropped 47,000 to 522,000 in the July 11th week, on top of a 48,000
slide the week before — combined falloff of 95,000. At the same time,
the non-seasonally adjusted data soared 108,000 over the past two weeks. Go
back to the same two weeks in 2008 and you will see that a similar decline in
unadjusted claims (-115,000) translated into an 18,000 drop in the seasonally
adjusted data.
So something with the seasonal factors is at play here; not the economy. Note
that in the month after the seasonal auto effects ran their course last year,
claims popped up more than 80,000.
To be sure, continuing claims plunged a record
642,000 to a still-high 6.273 million but this actually reflected bad news in
the sense that it likely reflects the end of the up-to-20 weeks extended
benefits that President Obama provided under the stimulus plan. These people
are certainly not going to be doing very much spending over the next little
while.
Also note that the claims data would be much higher if a record number of
unemployed folks weren’t seeing their benefits cut off — see the
chart below for an illustration of what we are talking about.
Take a good look
at that chart. It's 50,000 now. It is expected to be 500,000 by September and
1.5 million by the end of the year. What are the odds Obama creates 1.5
million jobs by the end of the year? I suggest the answer is zero.
Mish
GlobalEconomicAnalysis.blogspot.com
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