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When watching for the recovery, continuing jobless claims are key

Nancy Marshall-Genzer May 21, 2020
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A sign at a gas station tells customers it is closed. Unemployment has reached alarming levels in the United States. Spencer Platt/Getty Images
COVID-19

When watching for the recovery, continuing jobless claims are key

Nancy Marshall-Genzer May 21, 2020
Heard on:
A sign at a gas station tells customers it is closed. Unemployment has reached alarming levels in the United States. Spencer Platt/Getty Images
HTML EMBED:
COPY

The Labor Department reported Thursday that another 2.4 million people filed for unemployment benefits last week. That’s down from the week before, but still about the population of Houston. There are a couple of ways the government measures unemployment filings. Initial jobless claims — what we got today — and the number of overall continuing claims. The difference between the two matters.

Initial jobless claims are how many new people file for unemployment benefits in a week. Continuing claims measure the total number of workers on unemployment. Cornell economist Erica Groshen said to think of it like a bathtub.

“The initial claims is how much water is flowing into the bathtub, and the continuing claims is how much water is in the bathtub,” Groshen said.

Each number is important. Chris Rupkey, chief financial economist at the global financial group MUFG, follows both.

“Well, that’s why God gave us two eyes. You have to watch both,” he said.

But Rupkey said when he wants to tease out underlying trends, the continuing claims number is more important.

“Because the minute the total number of people receiving unemployment starts to come down, that’s the key signal that the labor market’s improving,” he said.

The continuing jobless claims numbers will play a key role in whether the post-coronavirus recovery looks like a “V” or “U” — meaning the economy improves quickly — or is flatter, like an “L.” Dartmouth College economist Patricia Anderson will be watching that.

“If the continuing claims start falling fairly rapidly, that’s a good sign that we might be more U-shaped than L-shaped,” she said.

If the continuing jobless claims keep plodding along at about the same rate, Anderson said that’s not a sign that we’re really turning the corner.

COVID-19 Economy FAQs

So what’s up with “Zoom fatigue”?

It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.

How are Americans spending their money these days?

Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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