Additional 6.6M File for Initial Unemployment Benefits [pdf]

Building on my analysis from last week:<p>1. This week&#x27;s 6.6M new jobless claims represents ~4% of the estimated ~160-165M US Workforce.<p>2. This is incremental to the 3.3M new jobless claims filed week ending 3&#x2F;21, totaling ~10M total jobless claims in the past 2 weeks.<p>3. The US unemployment rate was ~3.5% as of EOM February [1], so cumulatively that means we&#x27;ve hit ~10% unemployment as of EOW 3&#x2F;28 (~10M incremental jobless claims = ~6%). That number is likely low and continuing to increase, as new jobless claims do not account for gig workers and many state unemployment sites have been inundated by these claims resulting in site crashes and people unable to file claims. In addition, layoffs have almost certainly continued between 3&#x2F;28 and today.<p>4. The consensus estimate for this week&#x27;s jobless claims was ~3.76M jobless claims, and the 6.6M actual claims blow the consensus estimate out of the water. That said, some analysts such as Goldman Sachs had estimated ~5.5M joblesss claims. Goldman Sachs estimates that unemployment will peak at ~15%. [2]<p>[1] <a href="https:&#x2F;&#x2F;data.bls.gov&#x2F;timeseries&#x2F;LNS14000000" rel="nofollow">https:&#x2F;&#x2F;data.bls.gov&#x2F;timeseries&#x2F;LNS14000000</a><p>[2] <a href="https:&#x2F;&#x2F;www.cnbc.com&#x2F;2020&#x2F;03&#x2F;31&#x2F;coronavirus-update-goldman-sees-15percent-jobless-rate-followed-by-record-rebound.html" rel="nofollow">https:&#x2F;&#x2F;www.cnbc.com&#x2F;2020&#x2F;03&#x2F;31&#x2F;coronavirus-update-goldman-s...</a>

Unemployment benefits have been significantly expanded under the Coronavirus aid bill. The benefit amounts will sound small if you&#x27;re living in an expensive city like SF or Seattle, but $600&#x2F;week from the federal government and a similar amount from state unemployment insurance means that unemployment benefits can pay up to an equivalent of $50-60K&#x2F;year right now. That goes a long way in most parts of the country, especially when you&#x27;re stuck at home. Of course companies are going to opt to shift people to unemployment benefits while they&#x27;re forced into downtime.<p>In some situations, people can actually earn <i>more</i> from unemployment benefits by being laid off due to some hasty oversights in the aid package (Reference: <a href="https:&#x2F;&#x2F;www.cnbc.com&#x2F;2020&#x2F;03&#x2F;27&#x2F;how-unemployed-workers-could-get-more-than-100percent-of-their-paycheck.html" rel="nofollow">https:&#x2F;&#x2F;www.cnbc.com&#x2F;2020&#x2F;03&#x2F;27&#x2F;how-unemployed-workers-could...</a> ). This doesn&#x27;t account for lost benefits or the risk involved in losing a job, but it could disincentivize people returning to work if it means their income will go down.<p>Of the many people I know who have been “laid off”, all of them have been told they’ll be first in line to be re-hired the moment quarantine ends.<p>If a business can’t make money, it makes more sense for them to let employees collect unemployment during the downtime than to overextend the business’s balance sheet. During normal times, this is a common tactic for seasonal businesses. I have friends in seasonal tourism industries who received training on applying for unemployment benefits during their annual off-season layoffs each year. They even have an explicit system for tracking seniority in the re-hires.<p>Of course, the longer this quarantine lasts, the more likely their businesses are to disappear before they can re-open. Unfortunately we won’t know this number for many months. For now, the initial unemployment claims number can&#x27;t discriminate between jobs that have been temporarily paused and jobs that have been eliminated.

For those living in cities that are locked down, what do yall do about daycare? In NYC, my daycare isn&#x27;t reimbursing fees, so we&#x27;re continuing to be charged with a promise of &quot;if insurance pays out, we&#x27;ll pass it down.&quot; With 2 kids, that’s $5,000. Assuming they’re closed for 3 months total, that’s $15,000 down the drain. Now, I get that they&#x27;re a small business, but their problem is that they can&#x27;t exactly layoff their daycare workers because the governing body for daycares are pretty strict and getting new employees take a lot of time. On top of that, they have rents due. So, I get it.<p>But this begs a more fundamental question: When are we going to start pressuring insurance companies and rent-seekers to provide relief? Time and time again, all the bailouts of the past seem to benefit them, but during a time when we need insurance companies to pay out for business interruption instead of claiming &quot;act of God, we exclude pandemics...etc.,&quot; we fail to bring them into the conversation.

This chart is just getting crazier and crazier: <a href="https:&#x2F;&#x2F;pbs.twimg.com&#x2F;media&#x2F;EUmW1PgXYAEdggm?format=png&amp;name=4096x4096" rel="nofollow">https:&#x2F;&#x2F;pbs.twimg.com&#x2F;media&#x2F;EUmW1PgXYAEdggm?format=png&amp;name=...</a>

There&#x27;s a sense that once &quot;lockdown&quot; ends, thing go back to normal. In other words, the &quot;V&quot; shaped recovery is the dominant mental model.<p>Should that not materialize, the disappointment and anger will reach level not seen in most people&#x27;s lifetimes.<p>One reason the V-scenario might not play out is that the US still doesn&#x27;t have a handle on the testing problem. Without testing, you have no way to estimate the danger to the public of normalizing economic activity. At the first sign of a new outbreak, the entire lockdown cycle will repeat.<p>Too few people will have gained immunity, and the disease is far too contagious and deadly to take any chances. We still don&#x27;t know what &quot;immunity&quot; looks like at any rate.<p>Alternatively, the lies about testing may have burned people so badly by the time the &quot;all clear&quot; is given (whatever that looks like), that few will believe it. The effect would be a national strike&#x2F;boycott.

My job has been inundated with applications from people who are not even in tech in any way (think like barbers &amp; home depot workers). I see now why so many companies use automation to filter out resumes.

I&#x27;ve seen a lot of small businesses do the math, and realize that with the additional $600 provided by the stimulus bill, it actually works out better for some lower paid workers to lay them off (and presumably rehire later). I wonder if this might explain higher than expected numbers.

Expected 3M. This new figure is about 10x financial crisis high.

I hope that tech industry employees do not feel immune to this.<p>I encourage you to take a look at your customer base and think very critically about where that money is actually coming from.

Keep in mind that state unemployment websites and call centers are often overloaded and there are many complaints that people can&#x27;t even file in the first place.<p>It&#x27;s is highly likely that these high numbers continue for additional weeks because all the people who couldn&#x27;t get through will manage to get through in upcoming weeks.

Hopefully most of these people will be re-employed once the crisis has subsided a bit and our ability to handle the likely echo peaks of infections happen over the next year increases. There will certainly be starts and stops as the highly interdependent parts of the economy try to get streamlined again in a rather herky-jerky manner. No doubt some companies and maybe even large portion of industries collapse. Also companies that are healthy might take this situation as an opportunity to cut away what they consider to be dead weight under the cover of the crisis.<p>Unemployment numbers, if we&#x27;re lucky, will crash quickly but there&#x27;s going to be a long tail on the recovery.

The long term scars of this upcoming Depression will be unlike anything anyone under 70 has experienced. And the scars will be long lasting.<p>My mother in law used to use Cool Whip containers for leftovers. When we&#x27;d visit, she&#x27;d send us home with food packed in them. Usually stuff like mashed potatoes, but often good stuff too. And when we&#x27;d visit her in a few weeks&#x2F;month, she&#x27;d ask where her containers were. This was a generation that saved EVERYTHING. The idea of throwing something out was disrespectful. Waste was the worst of many mortal sins. All because of the Great Depression.

Any numbers on what is happening for software engineering unemployment?

Yet you wouldn&#x27;t know it based on the stock market.<p>Where is this collapse you all talk about? Donald Pump and Powell will just use infinite QE and monetary policy to fix all of our problems. After all, the US Dollar is still strong due to a liquidity shortage world-wide from everyone being desperate to convert domestic money to USD<p>Until that liquidity crisis dries up within the world, stonks seem only go up. Money printer goes brrrrr. I&#x27;ve never seen markets behave so effing irrationally before. Investors are pants on head stupid at a level that boggels my mind.<p>&quot;markets can be irrational longer than you can stay solvent&quot; is being proven to be sage advice with this pandemic.

Now let&#x27;s see how the gamblers and con artists who run health care can handle an uninsured nation in plague... smh.

Private health care will try to collect on all of their costs in regards to this pandemic, if the US government allows that it will kill the economy even further. How long until the US Government nationalizes Health Care?

How much of this is temporary and how much will be long term? Also how does the stimulus help here?

Is there any data on these numbers broken down by industry and profession?

The odd thing to me about it is that futures seem largely positive. Is it because the CAREs act or dropped labor is supposed to equal money not spent and thus meant to shield companies ( and investors )? I honestly do not get how market interprets it as good news.

Is the title incorrect? Reading the article it says an additional 3M, for a <i>total</i> of six million