Unemployment Will Rise - Lost Jobs

The Federal Reserve escalated its fight against inflation this week, instituting a major rate increase and saying more will likely follow. The moves will cause a jump in the number of unemployed Americans by the end of next year, the central bank said.

The Fed has put forward a series of aggressive interest rate hikes in recent months as it tries to slash price increases by slowing the economy and choking off demand. But the approach risks tipping the United States into a recession and causing widespread joblessness.

Fed Chair Jerome Powell on Wednesday acknowledged that rate hikes would cause pain for the U.S. economy, as growth slows and unemployment rises. He added, however, that "a failure to restore price stability would mean far greater pain later on."

The job losses forecasted by the Fed this week would by the end of 2023 raise the unemployment rate from its current level of 3.7% to 4.4%. That outcome would add an estimated 1.2 million unemployed people, according to Omair Sharif, the founder of research firm Inflation Insights.  READ MORE...

Live Without Working

Almost one-third of all working-age men in America aren’t doing diddly-squat. They don’t have a job, and they aren’t looking for one either. One-third of all working-age men. That’s almost 30 million people!

How do they live? What are they doing for money? To me, this is one of the great mysteries of our time.

I’m certainly not the first person to make note of this shocking statistic. You’ve heard people bemoaning this "labor participation rate," which is simply the number of working-age men (usually counted as ages 16 to 64) who are working or are seeking work, as a percentage of the overall labor force.

It’s true that the pandemic, which of course produced a number of factors that made working more difficult never mind dangerous, pushed the labor participation rate to a record low. 

But the fact that millions of American males have not been working precedes COVID-19 by decades. In fact, the participation rate for men peaked at 87.4% in October 1949 and has been dropping steadily ever since. It now stands at 67.7%.  READ MORE

Unemployment Insurance Benefits

Sam Ro at AXIOS writes: 

About 1.8 million out-of-work Americans have turned down jobs because of the generosity of unemployment insurance benefits, according to Morning Consult poll results released Wednesday.

Why it matters: 

• U.S. businesses have been wrestling with labor supply shortages as folks capable of working have opted not to work for a variety of reasons.
• One of the more politically controversial reasons has been the availability of unemployment insurance benefits, in particular emergency provisions that were introduced because of the COVID-19 pandemic.

Indeed, 26 states opted to cut emergency benefits early with the intention of incentivizing people to take open jobs.

By the numbers: Morning Consult surveyed 5,000 U.S. adults from June 22-25, 2021.

• Of those actively collecting unemployment benefits, 29% said they turned down job offers during the pandemic. In response to a follow-up question, 45% of that group said they turned down jobs specifically because of the generosity of the benefits.
• Extrapolating from the 14.1 million adults collecting benefits as of June 19, Morning Consult concluded that 1.8 million people turned down job offers because of the benefits.

To be clear, this is in regards to any and all unemployment insurance benefits including the standard 26 weeks worth of benefits as well as the emergency benefits that are set to end by September.

Furthermore, all 1.8 million won’t necessarily find employment quickly as jobs once offered to them may have been filled by others.

What they’re saying: Morning Consult chief economist John Leer cautions against concluding that this completely validates calls to cut unemployment benefits early.

The bottom line: "Getting people to move from relying on unemployment insurance to wage income doesn't just automatically happen," Leer tells Axios. "There's going to be some searching and matching frictions at work."

Inflation B Good

Because of all the spending by our Federal Government, the US inflation rate has increased to 3% and is expected to increase and possibly stabilize at 4% which is incredibly good news for ALL AMERICANS because it means that Americans will be paying more for goods and services, leaving them less and less money to save or spend on other necessities...  should the occasion arise.

• More for gasoline
• More for food
• More for clothes
• More for medicine
• More for electricity

With this kind of inflation, unemployment insurance payouts will not last as long as it did before with this kind of inflation and it is this kind of inflation that financially hurts older senior citizens who are living only on Social Security without any other sources of income.

The new Presidential Administration should be complemented because they are the ones that caused this...  We should feel fortunate that we have such brilliant people at the helm of our country and who are making these clever decisions on behalf of the American people.