It's August 2020, the unemployment rate has gone down since April what do you predict for 2021 ? (bankrupt, student loan)

[jonbenson]

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It's August 2020, the unemployment rate has gone down since April

what do you predict for 2021 ?

keeping in mind the below
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https://www.forbes.com/sites/erikshe.../#5c0888bd1c2a


What’s The Real Unemployment Rate: 10.2% Or 18.8%?
Erik Sherman
Erik ShermanS

Forbes

1. An unemployment rate of 10.2% is worse than the nadir during the Great Recession.

2. The job growth rate has significantly slowed and, without fiscal stimulus, could fall further.

3.Unemployment among Whites was 9.2%. For Blacks, 14.6%. Asian, 12.0%. Hispanics, 12.9%. Adult women’s unemployment of 10.5% is heavier than the 9.4% of men. There are some huge disparities, and probably perceptions, of impact.

4.The number out of work from 15 to 26 weeks shot up from 1.9 million in June to almost 6.5 million in July (increase of 4.6 million). The number unemployed from 5 to 14 weeks dropped from 11.5 million to 5.2 million (decrease of 6.3 million). That suggests the majority moved to being out of work for even longer—at least four months. (How well would most people do if out of work for that long?)

5.The number of unemployed is still 10.5 million higher than in February.

6. About a third of the additional jobs came in leisure and hospitality, and those are the ones likely to get hit hard again as big states that have seen virus resurgence find themselves having to reclose businesses.

7. The broader U-6 measure of unemployment, which includes such people as those working part-time but not of their volition and people who have given up, is at 16.5%.

8.There were about as many people who had permanently lost jobs in both months, so no increase, but also no decline.

9. People who usually work part-time increased by 803,000 to 24.0 million.

10.The household survey that establishes unemployment rates had a response rate of 67%—up a bit from June but still well off the average 83% for 12 months before the pandemic. When response rates significantly drop, chances are good that results are less accurate.

11. Many people were categorized as on temporary layoff rather than unemployed. Reclassifying them as out of work would mean official unemployment more than 11%.

12.Department of Labor unemployment insurance (UI) statistics show that as of July 18, 31.3 million people were claiming UI, compared to 30.8 million the previous week.

13.The BLS count says that 16.3 million are unemployed, or 14.5 million fewer than the ones getting UI.

[lieqiang]

Into the thread before Taggerung arrives saying everything is about to fall apart on a scale not seen since the Big Bang and life as we know it will end by 3:30 pm next Wednesday!

[mcsangel2]

It's going to skyrocket in a couple of months, as the law that forces companies to permanently cut the workforce that's been on 'furlough' for six months kicks in.

[lieqiang]

Originally Posted by jonbenson

11. Many people were categorized as on temporary layoff rather than unemployed. Reclassifying them as out of work would mean official unemployment more than 11%.

Wait, what?

U-3 unemployment measure has certain characteristics, as do other measures U-4, U-5, U-6 why would we speculate what the "official" unemployment rate would be if we added people who didn't match it's criteria? It would no longer be U-3.

[mathjak107]

large employers are manipulating the unemployment numbers right now .

these are things most arm chair economist wanna bees are not aware of .

i learned this from my son who is a prominent corporate attorney .


by law those furloughed have to go to full termination after 6 months .....march to sept is a 6 month window

so that means many who thought they were furloughed and getting benefits paid thought they had jobs and were still spending pretty freely .so they are going to go from furloughed to terminated in sept and oct .


when companies have mass terminations they must give a certain amount of notice to employees when they are terminating more then a certain amount of employees ...

to get around that , big companies have been bringing back just enough furloughed people so they stay under the 60 day notification required number .


that way they can just terminate furloughed employees . those employees brought back will be terminated down the road , again skirting the 60 days notice .

so we should see the employment numbers shrink for 2 or 3 months as just enough furloughed employees are brought back prior to the 6 month period , then re-grow as those brought back are re-fired


The WARN Act is not activated when a covered employer:

closes a temporary facility or completes a temporary project, and the employees working in the facility or temporary project were hired with the clear understanding that their employment would end with the closing of the work facility or the completion of the project; or
closes a facility or operating unit because of a strike or a worker lock-out, and the closing is not intended to evade the purposes of the WARN Act.
If a plant closing or a mass layoff results in fewer than 50 workers losing their jobs at a single employment site;
If 50 to 499 workers lose their jobs and that number is less than 33% of the employer's total, active workforce at a single employment site;
If a layoff is for 6 months or less; or
If work hours are not reduced 50% in each month of any 6-month period.

[KaraG]

Originally Posted by mathjak107

large employers are manipulating the unemployment numbers right now .

these are things most arm chair economist wanna bees are not aware of .

i learned this from my son who is a prominent corporate attorney .


by law those furloughed have to go to full termination after 6 months .....march to sept is a 6 month window

so that means many who thought they were furloughed and getting benefits paid thought they had jobs and were still spending pretty freely .so they are going to go from furloughed to terminated in sept and oct .

Good info. As for small businesses, many have been paying employees with the PPP funds and staying afloat with the SBA disaster loans. If their sectors don't get back to normal before these funds run out, they'll have no choice but to lay off more employees, go bankrupt or close down.

[mathjak107]

Originally Posted by KaraG

Good info. As for small businesses, many have been paying employees with the PPP funds and staying afloat with the SBA disaster loans. If their sectors don't get back to normal before these funds run out, they'll have no choice but to lay off more employees, go bankrupt or close down.

there are loads of reasons the numbers are going to look better than fall. including all those who were spending thinking they had jobs who are now finding out they hit termination and don't have jobs .

spending will fall big time and with it business .

[TimAZ]

Originally Posted by mathjak107

there are loads of reasons the numbers are going to look better than fall. including all those who were spending thinking they had jobs who are now finding out they hit termination and don't have jobs .

spending will fall big time and with it business .

So, S&P 5K?

Seriously, current economics remind me of the zeitgeist of the late ‘90s. Alan Greenspan was fearful of Y2K and he added over $1T of liquidity to head off any issues in the markets should there be a disruption from what we know in hindsight was a non-event. Greenspan’s hot money juiced the markets and we saw all kinds of crazy on display: watches that showed “internet” time, Home Depot’s open 24/7, WSJ articles about the “end of work”, etc., etc.

The parallel today is the knee-jerk pandemic stimulus spending, the majority of which ended up in the accounts of people and businesses who didn’t need it for consumption. Couple that with legislated forbearance on rents, student loans, and mortgages and we have the perfect setup chaotic spending patterns. I’d be willing to bet that many of the furloughed workers have already landed another WFH job while at the same time they collect their PUA and state UI benefits. Illegal? Of course but will the states ever investigate and know? Not going to happen.

We will not know the true unemployment numbers of this chaotic period for another 6-12 months. In the meantime the “markets” will continue to rally on the fairy tale.

[mathjak107]

Originally Posted by TimAZ

So, S&P 5K?

Seriously, current economics remind me of the zeitgeist of the late ‘90s. Alan Greenspan was fearful of Y2K and he added over $1T of liquidity to head off any issues in the markets should there be a disruption from what we know in hindsight was a non-event. Greenspan’s hot money juiced the markets and we saw all kinds of crazy on display: watches that showed “internet” time, Home Depot’s open 24/7, WSJ articles about the “end of work”, etc., etc.

The parallel today is the knee-jerk pandemic stimulus spending, the majority of which ended up in the accounts of people and businesses who didn’t need it for consumption. Couple that with legislated forbearance on rents, student loans, and mortgages and we have the perfect setup chaotic spending patterns. I’d be willing to bet that many of the furloughed workers have already landed another WFH job while at the same time they collect their PUA and state UI benefits. Illegal? Of course but will the states ever investigate and know? Not going to happen.

We will not know the true unemployment numbers of this chaotic period for another 6-12 months. In the meantime the “markets” will continue to rally on the fairy tale.

i would never attempt to guess where markets will go , i have been doing this to long to fall for the i know just how markets will play out crap . .. i allow for uncertainty and bad stuff in my investing and not try to rule it out.

this discussion was about unemployment numbers , not markets . main street and wall street dont look at the same things .

[ottomobeale]

I have a boss who thinks he can outguess the markets. He did great for 3 weeks. Hes $20K down now.

My official guess for 2021 is somewhere between 6.5% and16.5%. Knock wood just replaced the employer (going out mid sept) on my 2nd job.