Investing Feels The Easiest At Exactly The Wrong Time

Jobless clams are once again suggesting that the labor market improved in the month. This time claims weren’t impacted by Ohio’s normalization. In the week of May 15th, initial jobless claims fell from 478,000 to 444,000 which was 16,000 below the consensus and 6,000 below the lowest estimate. It was a great reading. We are getting closer to a full labor market almost every week. Non-seasonally adjusted claims have fallen 3 straight weeks. They fell from 492,000 to 455,000 in this past report. PUAs fell from 104,000 to 95,000.

The most important aspect of unemployment benefits isn’t the latest reading. It is the incoming changes almost half the states are making in the next couple of months. At least 21 states are going to end the emergency unemployment benefits before the September 6th deadline. The map above shows many of the end dates. This comes out to 3.5 million people coming off benefits in the next couple months. 940,000 people will lose the extra $300 in weekly benefits given by the federal government. 1.4 million people will lose PUA benefits plus the $300 extra. 1.1 million will lose PEUCs plus the $300 extra.

We are in a weird period where the pandemic is very close to over. There are millions of people on unemployment benefits programs even though there are millions of job openings that are going unfilled. Specifically, in the week of May 1st, the total number of people on all benefits programs fell from 16.86 million to 15.98 million people. That’s still a ton of people who should be working given the state of the labor market. It’s a weird situation for there to be labor shortages and almost 16 million people getting government help.

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