As the US labor market recovery stalls, the second wave of layoffs is underway. The overhyped nonfarm payrolls “recovery” and bounce in retail sales (ignoring the lack of ‘V’ in industrial production), was reversed on Thursday morning when 1.508 million more Americans filed for unemployment benefits.
With plunging demand and fractured supply chains – companies are not highering at the pace that would support President Trump’s and Wall Street’s claims of a V-shaped “rocket ship” recovery in economic growth and employment. Leading indicators are showing the economy barely bounced after the most significant crash in six decades.
Any green shoots observed in the last month will be stifled by stubbornly high joblessness through the summer, resulting in slower recovery and the shape of the recovery resembling a “U” or “L.”
“The recent sightings of green shoots for economic growth are going to fade in a hurry if workers can’t return to the jobs they lost during the pandemic recession,” Chris Rupkey, chief economist at MUFG in New York, told Reuters.
The second wave of layoffs has already started in industries indirectly affected by the virus shutdowns. Another acceleration in layoffs is expected next month when the government’s Paycheck Protection Program expires.
The thirteen-week initial jobless claims have surged to an astonishing 45.7 million. So far, about 29 million people are collecting unemployment insurance, while millions of others have yet to receive any checks.
The cost of late unemployment benefits will not just damage the labor force and recovery – but has already resulted in thousands of people swarming a government building in at least one state – pleading for help as the economic depression crushes their household finances.
This is not a Trump rally at the Kentucky Capitol in Frankfort on Wednesday – but a massive unemployment line, filled with people who have filed but are unable to get their unemployment insurance checks.
The state police said it will be an 8 hour wait from the back of the line to speak to a state employee about unemployment. pic.twitter.com/plGONcpS6n
— Daniel Desrochers (@drdesrochers) June 17, 2020
Some folks waited ten hours at the Kentucky Career Center to speak with someone about finding assistance with their unemployment claim.
An eerie comparison of unemployment lines in the Great Depression and ones in Kentucky.
More pictures of the unemployment lines in Kentucky:
Economic depression doesn’t discriminate – it affects everyone in the bottom 90%.
Happening Now: hundreds in line waiting hours for in person help with KY unemployment. @GovAndyBeshear says 52k claims unapproved from March-May. The state started in person assistance again Tuesday as a group was coming to the Capitol to protest delays in UI benefits @WDRBNews pic.twitter.com/Gto7z0pEn0
— Gilbert Corsey (@gcorsey) June 17, 2020
This is only half of the line of people waiting to have unemployment claims resolved at the Capitol today pic.twitter.com/YFiMn7ZhIC
— Mike Fussell WAVE3 (@MikeFussellWAVE) June 17, 2020
Kentucky is not the only state overwhelmed with hundreds of thousands of unemployment insurance benefits claims. A backlog in claims has been observed in many other states as processing capacity has been stretched thin. Some of the most recent backlogs to be reported this week have been in Maryland, Washington state, Oregon, Michigan, New Jersey, Virginia, and Wisconsin.
Headlines in the last couple of days show some Americans are starting to protest several state governments’ broken unemployment states.
As the recovery is set to be a long journey, some Americans will have to get use to unemployment lines and breadlines.
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