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    Why Top Economists Are Citing a Higher-Than-Reported Jobless Rate

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesVaccine RolloutSee Your Local RiskNew Variants TrackerAdvertisementContinue reading the main storySupported byContinue reading the main storyWhy Top Economists Are Citing a Higher-Than-Reported Jobless RateThe official rate stood at 6.3 percent in January, but using an expanded metric, Fed and Treasury officials say it’s closer to 10 percent.A volunteer at a food distribution center in Inglewood, Calif. Economists are increasingly focused on a measure of unemployment that counts more people who are out of work.Credit…Jenna Schoenefeld for The New York TimesFeb. 22, 2021Updated 2:18 p.m. ETAmerica’s official unemployment rate has declined sharply after rocketing up last year, but top government economic officials are increasingly citing a different figure — one that puts the jobless rate at nearly 10 percent, well above its official 6.3 percent reading and roughly matching its 2009 peak.That emphasis on an alternative statistic, espoused by leaders including the Federal Reserve chair, Jerome H. Powell, and Treasury Secretary Janet Yellen, underlines both the very unusual nature of the coronavirus shock and a long-running shift in the way that economists think about weakness in the labor market.The Bureau of Labor Statistics tallies up how many Americans are actively looking for work or are on temporary layoff midway through each month. That number, taken as a share of the civilian labor force, is reported as the official unemployment rate. But economists have worried for years that by relying on the headline rate, they are ignoring people they shouldn’t, including would-be employees who are not applying to work because they are discouraged or waiting for the right opportunity. Looking at a more comprehensive slate of labor market measures — not just the jobless rate — came into style in a big way after the recession that stretched from 2007 to 2009.The current conversation goes a step further. Key policymakers are all but ditching the headline unemployment rate as a reference point amid the pandemic, rather than just downplaying its comprehensiveness. That highlights the unique challenges of measuring the labor market hit from the coronavirus, and it suggests policymakers will probably be hesitant to declare victory just because the job market looks healed on the surface.“We have an unemployment rate that, if properly measured in some sense, is really close to 10 percent,” Ms. Yellen said on CNBC Thursday. A week earlier, Mr. Powell cited the same figure in a speech about lingering labor market damage.Mr. Powell has been clear that he adjusts the headline unemployment rate for a simple reason: It’s leaving out a whole lot of people.“Published unemployment rates during Covid have dramatically understated the deterioration in the labor market,” Mr. Powell said during that speech. People dropped out of jobs rapidly when the economy closed, and with many restaurants, bars and hotels shut, there is nowhere for many workers who are trained in service work to apply.Enter the new, bespoke metric. To arrive at the 10 percent figure, Fed economists are adding back two big groups.What’s in an Unemployment Rate? Top economic officials are adding labor force dropouts and workers who are misclassified to the share of people who are actively searching for work.
    [embedded content]Sources: Federal Reserve calculations on Bureau of Labor Statistics Data, from Jerome H. Powell speech on Feb. 10The New York TimesThey count those who have been misclassified as “employed but not at work” in the Labor Department’s report, but who are actually on temporarily layoff. Then they add back people who have lost work since last February and are not applying to jobs right now, so that they are officially counted as outside the labor pool.The Coronavirus Outbreak More

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    Dip in Unemployment Claims Offers Hope as New Virus Cases Ease

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskNew Variants TrackerVaccine RolloutAdvertisementContinue reading the main storySupported byContinue reading the main storyDip in Unemployment Claims Offers Hope as New Virus Cases EaseWith restrictions lifting, workers in industries hard hit by the pandemic are getting a respite from layoffs, and job postings are increasing.A closed restaurant at Grand Central Market in Los Angeles. Workers in leisure and hospitality industries have been hit especially hard by job losses during the pandemic.Credit…Philip Cheung for The New York TimesFeb. 11, 2021Updated 5:59 p.m. ETAfter a pandemic-induced spike in layoffs amid new restrictions in many states, unemployment claims are falling, helped by a drop in new coronavirus cases.Initial claims for unemployment benefits declined last week, the Labor Department reported Thursday, and were significantly below the level in most of December and early January.New coronavirus cases have fallen by a third from the level of two weeks ago, prompting states like California and New York to relax curbs on indoor dining and other activities. That, in turn, has provided something of a respite for workers in the hardest-hit industries.Last week brought 813,000 new claims for state benefits, compared with 850,000 the previous week. Adjusted for seasonal variations, last week’s figure was 793,000, a decrease of 19,000.There were 335,000 new claims for Pandemic Unemployment Assistance, a federally funded program for part-time workers, the self-employed and others ordinarily ineligible for jobless benefits. That total, which was not seasonally adjusted, was down from 369,000 the week before.While claims remain extraordinarily high by historical standards, the improvement has raised hopes that layoffs will continue to slow as vaccinations spread and employers shift from shedding workers to adding them.“We’re stuck at this very high level of claims, but activity is picking up,” said Julia Pollak, a labor economist with ZipRecruiter, an online employment marketplace. Indeed, job postings at ZipRecruiter stand at 11.3 million, close to the 11.4 million level before the pandemic hit.The improving pandemic situation has eased the strain on restaurants and bars, Ms. Pollak added. But with a deficit of almost 10 million jobs since the pandemic struck, and employers still cautious about hiring, the economy faces broad challenges.Jerome H. Powell, the Federal Reserve chair, told the Economic Club of New York on Wednesday that policymakers should stay focused on restoring full employment, “given the number of people who have lost their jobs and the likelihood that some will struggle to find work in the postpandemic economy.”He noted that employment had dropped just 4 percent for workers earning high wages but “a staggering 17 percent” for the bottom quartile of earners.The Coronavirus Outbreak More

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    January 2021 Jobs Report: Outlook for Economic Recovery Dims

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskVaccine InformationWuhan, One Year LaterAdvertisementContinue reading the main storySupported byContinue reading the main storyAnemic Jobs Report Reaffirms Pandemic’s Grip on EconomyWith a gain of 49,000 jobs in January, and with few of those in the private sector, the labor market offers little relief to the nearly 10 million Americans who are unemployed. More

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    Continuing Job Losses Put Spotlight on Economic Relief

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    #masthead-section-label, #masthead-bar-one { display: none }The Jobs CrisisCurrent Unemployment RateWhen the Checks Run OutThe Economy in 9 ChartsThe First 6 MonthsAdvertisementContinue reading the main storySupported byContinue reading the main storyContinuing Job Losses Put Spotlight on Economic ReliefRelentless unemployment claims show the pandemic’s grip on the labor market. Help from the recent stimulus bill may lapse before an upturn arrives.Waiting for donations this week at a food distribution center in Inglewood, Calif. Hopes for an economic lift from coronavirus vaccinations have been set back by a slow rollout.Credit…Jenna Schoenefeld for The New York TimesJan. 21, 2021Updated 6:49 p.m. ETEven as it tries to right a shipwrecked economy, the Biden administration confronted fresh evidence of weakness Thursday with the report of nearly a million new state unemployment claims, heightening calls for fresh stimulus efforts.The scale of the job losses underscores the fragility of the job market as overall economic momentum slows amid the worsening pandemic. What’s more, key provisions of the $900 billion aid package passed by Congress last month will lapse in mid-March, well before economists expect mass vaccinations to help the economy rebound.“Unfortunately, the labor market started 2021 with very little momentum,” said Greg Daco, chief U.S. economist at Oxford Economics. “There hasn’t been any improvement, and if anything, there has been deterioration.”It is a perilous start for the administration, which is eager to make good on President Biden’s pledge to “build back better” but must first halt the damage as employers continue to let workers go.The Labor Department said Thursday that 961,000 workers filed initial claims for state unemployment benefits last week. On a seasonally adjusted basis, the total was 900,000.The figures were down from the previous week but remain extraordinarily high by historical standards and have recently reached levels not seen since midsummer. In the comparable week a year ago, before the pandemic, there were 282,000 initial claims.“It’s staggering, and it was worse than I thought,” said Diane Swonk, chief economist at the accounting firm Grant Thornton in Chicago. “This makes stimulus more urgent.”Mr. Biden found a similar predicament when he became vice president in 2009 with a contracting economy and Republican opposition to a big stimulus package. Although there are bright spots that didn’t exist then, like a rally on Wall Street and a strong housing market, White House officials want to avoid the lasting economic damage and slow growth that resulted from that recession.On Thursday, the administration pointed to the latest data to make its case for new spending.“This morning’s report on new unemployment claims is another stark reminder that we must act now,” said Brian Deese, director of the National Economic Council. The situation, he said, “will only worsen if bold action isn’t taken.”Mr. Biden has proposed a $1.9 trillion stimulus package that would include $1,400 in direct payments to individuals, expanded unemployment benefits and money for hard-pressed states and cities.In written testimony released Thursday as part of her Senate confirmation process, Janet L. Yellen, Mr. Biden’s nominee for Treasury secretary, reiterated the urgency of renewed aid.“Unemployment remains troublingly high, and millions of families are facing hunger or the risk of eviction,” Ms. Yellen, a former Federal Reserve chair, told a questioner. “Additional relief is needed to strengthen the economy, address our public health challenge and provide relief to communities that have been hardest hit.”Republicans have already registered resistance to another big spending plan.“We’re looking at another spending blowout,” Senator Patrick J. Toomey of Pennsylvania said at Ms. Yellen’s confirmation hearing on Tuesday. “The only organizing principle I can understand, it seems, is to spend as much money as possible, seemingly for the sake of spending it.”Democrats hope to push a coronavirus relief package through Congress in the coming weeks, with House Democrats postponing votes until the beginning of February as committees work to translate Mr. Biden’s coronavirus plan into legislation.“We’ll be doing our committee work all next week so that we are completely ready to go to the floor when we come back,” the House speaker, Representative Nancy Pelosi of California, said at her weekly news conference on Thursday.But with Ms. Pelosi yet to send the House’s article of impeachment against former President Donald J. Trump to the Senate, and with Senate leaders at odds over the terms of how to organize an evenly split chamber, it is unclear how quickly legislation can be processed. Democrats are also leaving open the possibility of using a process called budget reconciliation, requiring only a simple majority for approval, to push legislation through the Senate.A bipartisan group of 16 senators — including some who helped jump-start negotiations over the most recent coronavirus relief package — is expected to speak with Mr. Deese in the coming days about additional relief.The job losses have worsened in recent weeks, as new restrictions and lockdowns force service-sector employers like restaurants and leisure and hospitality establishments to close. If the trend continues, it could threaten other industries.“The level of layoffs is very high, and the virus is causing serious disruption,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.“More aid is needed for households and businesses,” she added. “Many businesses will shut down, and a lot of jobs will be lost without it. That poses a downside risk for the economy in the near term.”A movie theater in Culver City, Calif., with no coming attractions. Leisure industries have been particularly hard hit by the resurgent pandemic.Credit…Jenna Schoenefeld for The New York TimesIn another sign of weakness, the Labor Department reported this month that employers cut payrolls by 140,000 in December, the first decline since the mass layoffs of last spring.The beginning of vaccinations provided optimism about a quick turnaround. The slow rollout in many parts of the country has set back those hopes, though the stimulus package last month helped allay fears of a double-dip recession.Among the emergency federal programs extended by the recent legislation was Pandemic Unemployment Assistance, which helps freelancers, part-time workers and others normally ineligible for state jobless benefits. A total of 424,000 new claims were filed under the program last week, up from 285,000 the previous week.Mr. Daco of Oxford Economics said uncertainty about the program’s continuation might have held back claims late last year, so the jump last week could be due to belated filings as well as the overall weakness of the labor market.But Pandemic Unemployment Assistance and a $300 weekly supplement to state and federal unemployment benefits will both expire in mid-March without new legislative action.Ms. Farooqi said meaningful improvement in the economy was unlikely by then.“It’s going to be pretty rough over the next few months,” she said. “My expectation was and still is, at this level of infections, you will see layoffs mounting.”Over all, the best economic remedy is more vaccinations, said Carl Tannenbaum, chief economist at Northern Trust in Chicago.“There is no better economic stimulus than a successful vaccine rollout,” he said. “It will reduce the risk of human interaction and provide a basis on which different types of businesses can open more durably.”Some experts say it will take many months for most of the population to be inoculated. In the meantime, federal aid efforts are pegged to specific durations, rather than any meaningful improvement in economic conditions.That has created a series of cliffhangers in which help has hung in the balance as millions of unemployed Americans watched the news from Washington with anxiety. Although Democratic control of both chambers of Congress gives Mr. Biden an edge, the kind of ambitious stimulus faces challenging legislative dynamics.There are some signs of hope, despite the dismal jobs picture. The stock market has hit record highs in recent days, and the housing market continues to thrive, buoyed by rock-bottom interest rates.Some economists think the economy could boom when vaccinations are commonplace and pent-up demand sends consumers back to restaurants, onto airplanes and cruise ships, and into deserted downtowns. But there will be more pain before relief arrives.Emily Cochrane contributed reporting.AdvertisementContinue reading the main story More

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    Biden Tells OSHA to Issue New Covid-19 Guidance to Employers

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    #masthead-section-label, #masthead-bar-one { display: none }The Biden AdministrationliveLatest UpdatesBiden Takes OfficePandemic Response17 Executive Orders SignedAdvertisementContinue reading the main storySupported byContinue reading the main storyBiden Tells OSHA to Issue New Covid-19 Guidance to EmployersUnions, which largely support the new president, had complained that the Trump administration did little to protect workers from the coronavirus.Carolina Sanchez, left, whose husband died after contracting Covid-19 while working at a meatpacking plant, is comforted at a protest outside the Occupational Safety and Health Administration office in Denver last September.Credit…David Zalubowski/Associated PressJan. 21, 2021Updated 6:37 p.m. ETPresident Biden directed the Occupational Safety and Health Administration on Thursday to release new guidance to employers on protecting workers from Covid-19.In one of 10 executive orders that he signed Thursday, the president asked the agency to step up enforcement of existing rules to help stop the spread of the coronavirus in the workplace and to explore issuing a new rule requiring employers to take additional precautions.The other executive orders also relate to the pandemic, including orders directing federal agencies to issue guidance for the reopening of schools and to use their powers to accelerate the production of protective equipment and expand access to testing.Critics accused OSHA, which is part of the Labor Department, of weak oversight under former President Donald J. Trump, especially in the last year, when it relaxed record-keeping and reporting requirements related to Covid-19 cases.Under Mr. Trump, the agency also announced that it would mostly refrain from inspecting workplaces outside of a few high-risk industries like health care and emergency response. And critics complained that its appetite for fining employers was limited. Mr. Biden’s executive order urges the agency to target “the worst violators,” according to a White House fact sheet.Union officials and labor advocacy groups have long pleaded with the agency to issue a rule, known as an emergency temporary standard, laying out steps that employers must take to protect workers from the coronavirus. The agency declined to do so under Mr. Trump, but Mr. Biden supported the approach during the campaign.“We talked about a national standardized strategy for working men and women in this country to function under this cloud of the pandemic,” Rory Gamble, the president of the United Automobile Workers union, said after a meeting with Mr. Biden in mid-November. “He indicated he would do whatever it took.”OSHA’s oversight of the meatpacking industry under Mr. Trump attracted particular scrutiny from labor groups and scholars. A study published in the fall in the Proceedings of the National Academy of Sciences connected between 236,000 and 310,000 Covid-19 cases to livestock processing plants through late July, or between 6 percent and 8 percent of the national total at that point.That figure is roughly 50 times the 0.15 percent of the U.S. population that works in meatpacking plants, according to the study, suggesting that the industry played an outsized role in spreading the illness.The study found that a majority of the Covid-19 cases linked to meatpacking plants had likely originated in the plants and then spread through surrounding communities.The Biden AdministrationLive UpdatesUpdated Jan. 21, 2021, 7:22 p.m. ETFauci offers reassurances on vaccines, but warns that virus variants pose a risk.Biden is invoking the Defense Production Act. Here’s what that means.The No. 2 official at the F.B.I. is departing.Despite the problems identified by the study, the Trump administration did not include meatpacking plants in the category of workplaces that OSHA should regularly inspect. Only a small fraction of the roughly $4 million in coronavirus-related penalties that the agency proposed under Mr. Trump targeted the industry. Fines for any given plant were generally below $30,000.The Labor Department under Mr. Trump said it had assessed the maximum fines allowed under the law. But former OSHA officials have said that the agency can impose bigger fines by citing facilities for multiple violations, which could raise proposed penalties to over $100,000.Even when it did inspect meatpacking plants and propose fines, OSHA rarely required these employers to place workers six feet apart, the distance recommended by its own guidance.During a court case involving a plant in Pennsylvania whose workers complained last year that they were in imminent danger because of the risk of infection, OSHA wrote in a letter on Jan. 12 that it was OK with spacing at the plant, even though some workers were spaced less than six feet apart. Separately, union officials at two other plants where OSHA issued citations said workers continued to stand close to one another after the citations.Debbie Berkowitz, a senior OSHA official during the Obama administration who is now at the National Employment Law Project, a worker advocacy group, said she expected the Biden administration to issue a rule requiring meatpacking facilities to space workers six feet apart and mandating other safety measures, such as providing high-quality masks and improving ventilation and sanitation at their facilities.“OSHA had been sidelined under Trump,” said Ms. Berkowitz. “This is a signal they’re going to play a significant role in mitigating the spread of Covid-19,” she added, alluding to Mr. Biden’s executive order.The Biden administration is likely to revisit a wide variety of labor and employment issues from the Trump era, including a rule that would make it harder for employees of franchises and contractors to recover wages that were improperly withheld from them, and another rule that would likely classify Uber drivers and other gig workers as contractors rather than employees.On Wednesday, the new administration fired the general counsel of the National Labor Relations Board, a Senate-confirmed official who has wide latitude over which labor law violations the board pursues. The official, Peter B. Robb, was appointed by Mr. Trump and clashed frequently with unions.AdvertisementContinue reading the main story More

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    Unemployment Claims Rise Sharply, Showing New Economic Pain

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesA Future With CoronavirusVaccine InformationF.A.Q.TimelineAdvertisementContinue reading the main storySupported byContinue reading the main storyUnemployment Claims Rise Sharply, Showing New Economic PainWeekly filings for jobless benefits hit the highest level since July as the pandemic’s resurgence batters the service industry.A closed restaurant in Santa Barbara, Calif. The winter coronavirus wave has pummeled the leisure and hospitality industries.Credit…Bryan Denton for The New York TimesJan. 14, 2021Updated 7:08 p.m. ETTen months after the coronavirus crisis decimated the labor market, the resurgent pandemic keeps sending shock waves through the American economy.Though more than half of the 22 million jobs lost last spring have been regained, a new surge of infections has prompted shutdowns and layoffs that have hit the leisure and hospitality industries especially hard, dealing a setback to the recovery.The latest evidence came on Thursday when the Labor Department reported that initial claims for state unemployment benefits rose sharply last week, exceeding one million for the first time since July.Just days earlier, the government announced that employers had shed 140,000 jobs in December, the first net decline in employment since last spring, with restaurants, bars and hotels recording steep losses.“We’re in a deep economic hole, and we’re digging in the wrong direction,” said Daniel Zhao, senior economist with the career site Glassdoor. “The report obviously shows that the rise in claims is worse than expected, and there is reason to think that things are going to get worse before they are going to get better.”That prospect is all the more troubling because a major element of the relief package signed by President Trump last month — a $300 weekly federal supplement to other unemployment benefits — is set to run out in mid-March.President-elect Joseph R. Biden Jr. has said he will push a new stimulus package through Congress to provide a lifeline for workers and employers until the pandemic can be brought under control. His plan will include direct payments to most households along with aid to small businesses and local and state governments.The recent economic data has brought a new sense of urgency to such efforts, with millions struggling to make ends meet even as more job losses could be in the offing.The Labor Department said on Thursday that 1.15 million workers filed initial claims for state unemployment benefits during the first full week of the new year. A further 284,000 claims were filed for Pandemic Unemployment Assistance, an emergency federal program for freelancers, part-time workers and others normally ineligible for state jobless benefits. Neither figure is seasonally adjusted. On a seasonally adjusted basis, new state claims totaled 965,000.Before the pandemic, weekly filings typically totaled around 200,000.The holidays may have held down unemployment claims in previous weeks, with people waiting until the new year to submit claims. But several economists expressed skepticism that filing delays were a major driver of the uptick in claims last week.“I don’t think there’s any question that on the margin, there could be some unusual things going on,” said Mark Hamrick, senior economic analyst at Bankrate.com. “But we have to think also about the fact that these are not our grandfather’s unemployment lines — meaning much of this is done digitally. I think if one just tries to understand human nature, it doesn’t make a lot of sense that someone would be delaying a request for financial assistance when they’re out of work.”More likely, economists say, is that the $300 federal supplement prompted an increase in demand for benefits.Confusion over the new federal aid — which Mr. Trump spent several days threatening not to sign — may also have temporarily slowed down claims for Pandemic Unemployment Assistance, which fell during the week ending Jan. 2. The increase last week brought the numbers more in line with the previous elevated levels.Volunteers processing donations at a food pantry in Wichita, Kan. More than one million people filed new claims for unemployment benefits last week.Credit…Stephen Speranza for The New York TimesThose seeking new work have found diminishing prospects. Hiring slowed for five straight months before December’s outright reversal. In November, even before the recent surge in virus cases, the number of workers officially counted as unemployed outnumbered job openings by more than four million, according to the Labor Department.The Coronavirus Outbreak More

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    December Jobs Report: Recovery Goes Into Reverse

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    #masthead-section-label, #masthead-bar-one { display: none }The Presidential TransitionliveLatest UpdatesCalls for Impeachment25th Amendment ExplainedTrump Officials ResignHow Mob Stormed CapitolAdvertisementContinue reading the main storySupported byContinue reading the main storyJobs Recovery Goes Into Reverse as Pandemic Takes a New TollU.S. employment fell by 140,000 in December as virus cases surged. Leisure and hospitality businesses were hit hard, but some industries showed growth. More