Time heals all wounds … unless, of course, that time serves to mark your duration of unemployment … in which case each grating clock tick serves to further exact a lasting psychological toll while rubbing salt into an income uncertainty wound that remains very much open.
We’ll explore the following dynamics a bit further next week but suffice to say we’ve now hit the 27-week mark which sits as a dubious milestone across a number of dimensions:
- The notion of characterizing an ongoing 27-week shock spanning 7 months as “Temporary”, amenable to expeditious resolution and devoid of structural damage is objectively silly.
- Claims have come down but (inclusive of the decline associated with the methodology change) have completely stalled at current levels for 8 consecutive weeks – a flatline that still sits ~25% above anything observed historically and a level (and cumulative total) that would be wholly unfathomable outside of the current context.
- Yes, the time series data remains exceedingly noisy due to multiple filings, backlog processing (and the accounting impact on the reported weekly totals) and other distortions – and this week was no exception with the CA catchup (due to fire/weather related reporting issues we flagged last week) pushing the totals higher. We've reviewed the noise pool recurrently but, again, given the scale and scope of impact, serially dissecting marginal sources of distortion remains largely tangential to what matters. .
- Typically, Jobless benefits last 26 weeks. The pandemic payroll apocalypse began 27-weeks ago. Given delayed claims processing that plagued the entire process, the potential capacity for individuals to receive extended benefits under the PUA designation along with other vagaries around eligibility guidelines, nailing down with precision the pace and magnitude that individuals will begin rolling out of the Continuing Claims totals is somewhat quixotic.
The larger point, however, is a simple one. The roll-off is set to begin in the coming weeks and it’s likely to be some measure of front-end loaded simply given the temporal distribution of filed claims.
The impending eligibility roll-off also – in dystopian fashion – subsumes the impact of the expanding roll-off in FEMA sourced enhanced U.I. benefits (table below). It doesn’t really matter if you’re getting $300/wk less (or more) if you qualify for $0.
Meanwhile, ‘strategic’ dithering, political rancor, stimulus stalemates and overt convergence towards constitutional crisis.
