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Unemployment Trends: How Many Layoffs are Temporary?

Summary:
Unemployment ClassificationsThe above image is Table A-11 from the monthly jobs report.My chart shows all of the lines highlighted in yellow.The note explains why the numbers may not add up. They never do. The total of everything in yellow is 11,018.000. Separately, the BLS says the "total unemployed" is 11,061,000.  That's the official number but it is realistically low by many millions.Great Recession vs PandemicThe trend of the line in red, "Not Temporary Layoffs" is troubling. The BLS says there are 4,507,000 "not temporary" layoffs and 3,684,000 "permanent" layoffs. I wonder how many people think they will be called back, but won't? If people tell the BLS they think they will be called back, the BLS labels them temporary. The BLS counts "permanent" job losses but only as a subset of

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Unemployment Classifications

Unemployment Trends: How Many Layoffs are Temporary?

The above image is Table A-11 from the monthly jobs report.

My chart shows all of the lines highlighted in yellow.

The note explains why the numbers may not add up. They never do. The total of everything in yellow is 11,018.000. 

Separately, the BLS says the "total unemployed" is 11,061,000.  That's the official number but it is realistically low by many millions.

Great Recession vs Pandemic

Unemployment Trends: How Many Layoffs are Temporary?

The trend of the line in red, "Not Temporary Layoffs" is troubling. 

The BLS says there are 4,507,000 "not temporary" layoffs and 3,684,000 "permanent" layoffs. 

I wonder how many people think they will be called back, but won't? 

If people tell the BLS they think they will be called back, the BLS labels them temporary.

The BLS counts "permanent" job losses but only as a subset of the classification "job losers and persons who completed temporary jobs."

The superset of temporary plus non-temporary is 7,712,000. 

The BLS reporting seems more than a bit artificial especially since no one really knows what states will do with restaurants and bars.

Number of People Unemployed for 27 Weeks or More

Unemployment Trends: How Many Layoffs are Temporary?

There are currently 3,556,000 who have been out of work for 27 weeks or longer. 

The BLS labels that "long-term" unemployment.

Some of the long-term unemployed over the age of 60 will be forced into retirement just to have some money coming in. Others will go bankrupt. 

Expect the number in this category to rise dramatically and keep rising for perhaps a year after the recession is over.

More Shutdowns Means More Bankruptcies

  1. Ohio Gov. Restricts Weddings, Threatens to Close Businesses
  2. 24 States Reach Their Highest Level of Covid Hospitalizations
  3. Utah Governor Mandates Masks and Restricts Gatherings
  4. El Paso Shut Down as 10 Mobile Morgues Fill Up

States are increasing lockdowns again except this time there is no pandemic program in place to deal with the mess.

Layoffs and bankruptcies will soar. 

Already, Hundreds of Companies That Got PPP Loans Have Gone Bankrupt and that only counts the large companies. 

Thousands of small companies have undoubtedly gone under.

This is an economic disaster no matter what distinction the BLS makes between "temporary", "permanent", and "long-term".

Mish

Mike Shedlock
Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management (http://www.sitkapacific.com/). Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

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