Friday, June 11, 2021

May Flower: Unemployment Check

"Unemployment filings fell again last week as the improving public health situation and the easing of pandemic-related restrictions allowed the labor market to continue its gradual return to normal. Nationwide, applications for unemployment benefits remain high by historical standards, but they have fallen significantly in recent weeks after progress stalled in the fall and winter. There were still more than 9 million people receiving unemployment insurance under state programs — or emergency programs that extend state benefits — as of mid-April, the latest data available. That total, which does not include workers on Pandemic Unemployment Assistance, has fallen in recent weeks, but more slowly than new applications. At the peak of the crisis last spring, more than 20 million people were receiving benefits. Economists should get a clearer picture of the labor market’s progress on Friday when the Labor Department will release data on hiring and unemployment in April. The report is expected to show that employers added about 1 million jobs last month...."

At least the Globe is one of the top places to work in Massachusetts — unlike Hollywood or the New York Times.


Time to get roaring:

"US job openings soar to highest level on record" by Christopher Rugaber Associated Press, May 11, 2021

WASHINGTON — US employers posted a record number of available jobs in March, illustrating starkly the desperation of businesses trying to find new workers as the country emerges from the pandemic and the economy expands, yet total job gains increased only modestly, according to a Labor Department report issued Tuesday. The figures follow an April jobs report last week that was far weaker than expected, largely because companies appear unable to find the workers they need, even with the unemployment rate elevated at 6.1 percent.

The enormous number of openings will likely add fuel to a political dispute about whether the extra $300 in weekly federal unemployment aid, on top of a state payment that averages about $320, is discouraging those out of work from seeking new jobs. Many Republicans in Congress have argued that it is, and several states have threatened to cut off the $300 payments, with Georgia the latest state to consider such a move.

President Biden, who included the extra money in his $1.9 trillion rescue package approved in March, disputed that the $300 supplemental payment is to blame Monday, but he also urged the Labor Department to work with states on renewing requirements that those receiving aid must search for jobs and take a position if offered. The job search rule was suspended during the pandemic, when many businesses were closed.

“Anyone collecting unemployment, who is offered a suitable job must take the job or lose their unemployment benefits,” Biden said.

[Unless Illegal or Black]

Many people out of work are also reluctant to take jobs in service industries that require contact with the public for fear of contracting COVID-19, and many women aren’t searching for jobs because they haven’t found child care for children that are still at home taking online classes for at least part of the week.


Are you $ick of the excu$es yet?

"Business groups press to reinstate a ‘search for work’ requirement in return for jobless benefits; Most states have already reverted to the pre-pandemic rule" by Jon Chesto Globe Staff, May 18, 2021

As employers race to fill positions on factory floors and in restaurant kitchens across the state, their trade groups are pushing the Baker administration to reinstate a job-search requirement for people who are on unemployment.

State officials could nudge more people out of their homes and back into the workforce, the business groups say, if they revert to the pre-pandemic requirement that those who claim unemployment insurance benefits must show they are actively seeking work.

[They have some nerve after 14 months of this fraud with no let up in sight!]

Six business groups wrote Friday to labor secretary Rosalin Acosta, urging the state to restore the work-search requirement. They also suggested the state could use federal aid money to offer some sort of return-to-work bonus of as much as $1,500 a person, similar to what has been proposed in a number of other states.

[You mean a bribe?]

Their request was submitted when the state’s official date for lifting all remaining pandemic-related business restrictions was Aug. 1, but on Monday, Governor Charlie Baker moved that date up to May 29, citing progress with COVID-19 vaccinations.

Now, many consumer-facing businesses are in a mad scramble to find more workers before they return to full occupancy levels in less than two weeks.

“A couple of our members have said the new pandemic is the shortage of workers,” said Bob Luz, president of the Massachusetts Restaurant Association, and one of six executives whose names are on the letter to Acosta. “We’re looking for whatever help the administration can give us on this. I don’t think it’s the silver bullet, but it’s something that we can control and should control.”

[That wa$te will cost us $2 million in tax loot]

The other signatories represent the Greater Boston and Cape Cod chambers of commerce, the National Federation of Independent Business, the Retailers Association of Massachusetts, and the Western Massachusetts Economic Development Council.

“Bringing this search requirement back . . . will trigger a lot of people to reassess their current position and timeline and decide it is time to get back into the workforce,” said Jon Hurst, president of the retailers group.

Hurst said he’s optimistic that the job-search requirement could go back in place when Baker’s state of emergency is lifted — now set for June 15 — though he would prefer to see it happen on May 29, to coincide with the full reopening.

Baker spokesman Terry MacCormack declined to say when state officials might reinstate the job-search requirement, other than to note that the administration has rolled out roughly $700 million in small-business grants to help keep workers on payrolls during the pandemic and that it will “continue to take the steps necessary to ensure more Massachusetts residents get back to work.”

State officials say the requirement was suspended in March 2020 after the state received updated federal guidance and is not tied to the state of emergency.

Suspending the requirement was a common response across the country in the early days of the pandemic, when entire sectors of the economy were essentially shut down, but as states lift pandemic restrictions, they’re also bringing the rule back: Forbes reported on Monday that at least 36 states had reinstated the job-search requirement or had announced plans to do so.

As of March, the Massachusetts Department of Unemployment Assistance had documented more than 116,000 people claiming unemployment insurance benefits. That remains well above typical monthly levels, but it also shows considerable progress: The number peaked last May, when more than 500,000 people in Massachusetts were on unemployment. The monthly total has largely been trending downward ever since.

Worker advocates raised concerns about reviving the requirement right now. After all, they said, the pandemic isn’t over.


John Drinkwater, workforce development specialist at the Massachusetts AFL-CIO, said parents who don’t have access to adequate child care, such as after-school programming, could be at a disadvantage, as well as people with immunocompromised household members who may not want to return to a workplace where colleagues or customers aren’t wearing masks.

“The search requirement isn’t a bad thing as long as we’re not throwing people off benefits for turning down work that may not be suitable for their circumstances,” he said.

Monica Halas, a consulting attorney with Greater Boston Legal Services, said she takes issue with the implication that a significant number of the people getting aid aren’t looking for work. “There’s a lot of misinformation out there that people are refusing jobs,” Halas said.

[I read a Globe every morning]

Some say the worker shortage could be a wakeup call to improve pay and working conditions. That’s certainly what Carlos Aramayo, president of the union Unite Here Local 26, argues when referring to challenges facing the restaurant industry. “If you improve people’s pay, it’s going to bring people back,” he said.

Prior to the rule’s suspension, Massachusetts required people receiving unemployment benefits to show they had conducted at least three job inquiries a week, such as by submitting an application or arranging an interview. They also had to keep a log of their efforts. Employment lawyers said that reinstating the rule could send the right message.

“It’s hard to imagine that it couldn’t help, at least by putting some awareness into people who are receiving benefits that those benefits could be subject to withdrawal if you’re not looking for work,” said Susanne Hafer, a lawyer with Sullivan & Worcester.

Andrew Prescott at Nixon Peabody said unemployment benefits were always intended to provide a short-term cushion for displaced workers, until they found new “suitable” employment.

“I don’t think it’s an onerous burden to show that you are at least trying to get a job,” Prescott said. “The Legislature never intended it to be a long-term welfare benefit, so that people could opt out of the job market for extended periods of time.”

[They should all be put on unemployment!]

Now go $hopping!

"Retailer results so far show people are going out, spending" by Anne D’Innocenzio Associated Press, May 18, 2021

NEW YORK — At Walmart, sales of teeth whitener are popping as customers take their masks off. So are travel items. Macy’s says that special occasion dressing like prom dresses are on the upswing as well as luggage, men’s tailored clothing, and dressy sandals.

Shoppers, newly vaccinated, are emerging from their homes and going out again, and that, along with government stimulus payments, is helping to boost fiscal first-quarter results for major retailers Walmart and Macy’s. They were among the first to release figures that covered the spring period. Walmart, the nation’s largest retailer, boosted its annual earnings-per-share outlook, while Macy’s surprisingly swung back into the profit column and it boosted its guidance for all of 2021.

“Our optimism is higher than it was at the beginning of the year,” said Walmart CEO Doug McMillon. “In the US, customers clearly want to get out and shop.”

Jeff Gennette, CEO of Macy’s, told analysts on the earnings call Tuesday that shoppers feel more emboldened to shop.

Home Depot, the nation’s largest home improvement chain, also delivered stellar results on Tuesday, showing that an overcharged housing market continues to keep aisles full. The Atlanta-based company reported sales that blew past Wall Street expectations.

The overall strong results are a good omen for other major retailers who are slated to report their results in the next few days. During the height of the pandemic-induced lockdowns, Walmart and Home Depot were allowed to stay open, while non-essential retailers like Macy’s were forced to temporarily close, dealing a devastating blow to business. That helped increase the dominance of big box chains.

Tuesday’s results show that for now, Walmart and Home Depot are able to keep sales strong even as the pandemic eases. Walmart served as a pandemic lifeline for shoppers loading up their pantry with groceries and basic household goods, while Home Depot benefited as shut-in shoppers continue to focus on making home improvements. Macy’s solid comeback is encouraging news for other department stores and specialty chains, indicating that customers are ready to buy clothing, a business that was in the dumps.....

[Which is where all this belongs as the ban on evictions is reinstated because of home prices]


When you add it all up after all the talking, you will be left taking charity from the Salvation Army after losing everything.

Now back to work:

"The WeWork office near South Station at 745 Atlantic Ave. was once the company’s biggest location in the country. Now it’s another chapter in the co-working giant’s epic fall. It’s an ignominious end for what had been one of WeWork’s first locations in Boston....."

At least you can file a claim:

"US jobless claims fall again as some states end federal aid" by Christopher Rugaber Associated Press, May 20, 2021

WASHINGTON — The number of Americans seeking unemployment aid fell last week to 444,000, a new pandemic low and a sign that the job market keeps strengthening as consumers spend freely again, viral infections drop, and business restrictions ease.

Thursday’s report from the Labor Department coincides with moves by nearly all the nation’s Republican governors to cut off a $300-a-week federal unemployment benefit that they and many business executives blame for discouraging the unemployed from seeking jobs. Those cutoffs will begin in June. Jobless people have been able to receive the $300 weekly benefit on top of their regular state unemployment aid. In addition to ending the federal benefit, most of the same states are also withdrawing from programs that provide jobless aid to self-employed or gig workers and to people who have been unemployed for more than six months.

As the job market steadily recovers from the pandemic recession, consumers are showing more confidence and spending at a healthy rate. Most economists think the economy could expand 7 percent this year, which would amount to the fastest annual growth in more than 35 years, yet the rapid reopening from the pandemic has created a wide range of supply shortages that have disrupted what economists had hoped would be a smooth rebound. Home building fell sharply in April, for example, as builders struggled with shortages of lumber and labor.

[That's a crock. The supply shortages are intentional so they can Re$et!]

Eliminating the $300-a-week payment is one of several measures that states have taken to restrict or eliminate jobless aid and press more recipients to seek work. That trend gained momentum after the April jobs report, released earlier this month, showed that employers added far fewer jobs than expected, in part because many couldn’t find enough workers.

Research suggests that roughly half the unemployed are receiving more income from jobless benefits, when you include the weekly $300 federal supplement, than their former jobs paid them. An analysis by Bank of America found that people who earned under $32,000 at their old jobs are likely now receiving more in unemployment aid than they did from working, yet some point to the steady decline in the number of Americans receiving jobless benefits as evidence that most of the unemployed are still willing to take jobs when they’re available.

“Today’s data indicates that unemployment aid is not keeping workers on the sidelines,’' said Andrew Stettner, a senior fellow at The Century Foundation. “Emergency unemployment aid is doing what it is meant to do: Serving as a temporary lifeline while workers search for and return to work.”

In July last year, four months after the pandemic tore through the economy, roughly twice as many people as now — 32 million — were receiving some form of unemployment benefit, though that figure was likely somewhat inflated by fraud. As recently as late February this year, about 20 million people were receiving aid.....

[OMG, undercounts here, overcounts there! When does it end?]

Meanwhile, you will soon be required to look for a job in Massachusetts with benefits reduced to offset whatever new wages they receive and as the Paycheck Protection Program runs dry, and as GOP-run states slash jobless aid, the Biden administration finds it has few options as the New Order is imposed from on high.


"Baker administration delays unemployment bills again to buy more time to fix fee spike; Employers now have until Aug. 2 to pay their first-quarter unemployment insurance bills" by Jon Chesto Globe Staff, May 24, 2021

The state Department of Unemployment Assistance on Monday again extended the due date for employers to pay their quarterly unemployment insurance bills, to allow more time for state officials to prevent a surprising spike.

Employers’ first-quarter bills are now due Aug. 2. They were originally due April 15, but last month the department extended the deadline to June 1.

The issue revolves around what is known as the solvency assessment. The rate skyrocketed because federal law prevents the state from raising rates specifically for companies that laid off workers due to pandemic-related problems.

Normally, companies with layoffs are penalized, but the costs of paying unemployment benefits to workers displaced by the pandemic are being shared by all. That triggered a massive jump in the solvency assessment, with many companies facing increases of more than $1,000 per employee this year.

State lawmakers had once thought there would only be a modest increase, at most, in unemployment insurance bills after they froze the rate schedule in March, but they didn’t freeze the solvency surcharge at the time. Then the first-quarter unemployment insurance bills started showing up with the new solvency assessment, enraging many small-business owners.

In reaction, state lawmakers sent legislation last week to Governor Charlie Baker that would spread these costs of pandemic-related layoffs over 20 years. The administration is still reviewing that legislation.....

[Maybe they could offset that fee, too]

Here is the Globe's $olution to the looting, 'er, cri$i$:

"It’s the Big Idea of the early Joe Biden administration: Getting the country back to normal after the pandemic is just a start. That’s why the president is pitching a nearly $4 trillion national rehab project focused on new roads and universal broadband, free child care and community college, and aggressive action on climate change and income inequality, but there’s only a nod in the White House’s ambitious agenda to unemployment insurance, a mainstay of the social safety net that was pushed to the brink of collapse when COVID-19 threw more than 20 million people out of work in March and April of 2020. The lack of urgency is head-scratching with a president who has made shoring up economic security for working families a top priority. What’s more, there’s a ready solution: making unemployment insurance a fully federal program, like Social Security. This isn’t a new idea, but....."

Spoken like a true totalitarian communi$t, and just add it to the budget (never mind the debt to be covered by the tax increase).

Better read the fine print fir$t:

"The state will not explain a mysterious ‘‘system processing error” at the DUA" by Sean P. Murphy Globe Staff, May 27, 2021

In the last two months, the number of people making new claims for unemployment insurance in Massachusetts has plummeted by almost 60 percent.

It is an impressive figure, a sign of a quickly recovering economy, but one that comes with a perplexing caveat from the state agency that administers unemployment benefits.

In each of its last eight weekly reports on unemployment claims, the state Department of Unemployment Assistance has included this two-sentence caution:

“Please note that due to a system processing error, initial claims filings for regular [unemployment insurance] for the current and prior week are estimated values and included here as reported to the [US Labor Department]. The corrected values will be provided when they become available.”

Estimated values? Corrected values? A system processing error? What does that mean? How accurate (or inaccurate) are the numbers being released?

The DUA won’t say, continuing its long-standing practice of refusing to answer questions about its operations.

[That's Ma$$achu$etts transparency and accountability there]

A DUA spokesman on Wednesday did not response to a request for an explanation of the caveat.

On Thursday morning, the spokesman, after being asked again for an explanation, promised to “look into” it and “get back” to the Globe.

On Thursday evening, the DUA responded by citing “a technical issue,” without further description. It said the issue is causing no delay in the payment of benefits to claimants.

There is some precedent for “a system processing error.” When the fallout from the pandemic sparked massive layoffs last spring, the crush of new applications for unemployment nearly overwhelmed the DUA and its creaky computer system.

Many frustrated applicants complained of being stymied by computer glitches, including rampant problems trying to input passwords, income amounts, even names.

Complaints about glitches were soon replaced with complaints about delays in processing claims after Massachusetts became one of many states hit by a nationwide fraud scheme.

The DUA responded to the deluge of fraudulent claims by interrupting weekly payments to some claimants and blocking the initial filings of others as it investigated, but the Baker administration released very little information about the extent of the scam or what it was doing about it, drawing a rebuke from Attorney General Maura Healey.

“The Baker administration has given little information for people to understand what’s going on,” Healey said in June, “and clear and transparent information is vital to the public.”

Healey said then that her office had heard complaints from hundreds of people either cut off from benefits or blocked from making new filings.

Governor Charlie Baker, at a press conference back then, said, “We know how important these benefits are, but we absolutely positively have to make sure that this money goes to the people it’s intended to go to, and not to these people who are trying to rip the system off.”

[Banks excepted]

In November, Baker was again asked about new delays in processing benefits in response to a surge in fraudulent claims.

“There is a tremendous amount of bot-based fraud going on,” he said, referring to software programs that allow crooks to flood the system with claims using stolen personal information, but when the Globe followed up on that comment with detailed questions, including about how fraud cases affected the weekly unemployment numbers being released by the DUA, the Baker administration fell silent.

[Oh, they are so intrepid, 'eh?]

I wonder how they would innovate were they to find themselves out of a job.

"US jobless claims fall to 406,000, a new pandemic low" May 27, 2021

WASHINGTON — The number of Americans seeking unemployment benefits dropped last week to 406,000, a new pandemic low and more evidence that the job market is strengthening as the virus wanes and economy further reopens.

The nationwide decline in applications for unemployment reflects a swift rebound in economic growth. The government separately estimated Thursday that the economy expanded at a strong annual pace of 6.4 percent in the first three months of this year, unchanged from its initial estimate.

More Americans are venturing out to shop, travel, dine out, and congregate at entertainment venues. All that renewed spending has led companies to seek new workers, which helps explain why a record number of jobs is now being advertised, yet many businesses complain that they can’t find enough applicants for all those open jobs, even though the unemployment rate remains 6.1 percent, well above the 3.5 percent rate that prevailed before the pandemic struck in March of last year. Job growth slowed sharply last month compared with March, a surprise pullback that was largely ascribed to a labor shortage in some industries.

[They went on a hiring binge in May, $igh]

Economists blame a range of factors for the shortfall of workers, including an extra $300-a-week payment that people receiving jobless aid have been able to get, on top of their state unemployment check, since March. The federal benefit was included in President Biden’s $1.9 trillion rescue package. With many people able to earn more from their combined federal and state jobless aid than from their former jobs, the extra income has likely discouraged some of the unemployed from seeking work, some analysts say.

Other people remain reluctant to take jobs in restaurants, hotels, and other service industries for fear of contracting COVID-19, and some women can’t return to work without adequate child care, though recent research by two economists found the impact of this factor to be relatively small.

Complaints from businesses that they can’t find enough workers have led most Republican governors to curtail unemployment aid. Twenty-four states, including such populous ones as Texas, Florida, Georgia, and Arizona, have said they will stop paying out the supplemental $300-a-week federal jobless payment beginning in June.

Twenty of those states also say they will stop participating in two emergency programs. One of those programs covers self-employed and gig workers. The other provides aid to people who have been unemployed for more than six months. The cutoffs of those two programs could cost at least 2.5 million people all their jobless aid.....


"The US economy grew at a robust annual rate of 6.4 percent in the first three months of this year, unchanged from the government’s initial estimate. The recovery from last year’s deep recession gained steam at the beginning of this year, helped by vaccines to combat the virus and trillions of dollars in government assistance. The rise in the gross domestic product, the economy’s total output of goods and services, was the same as the government’s first look one month ago, the Commerce Department reported Thursday. Upward revisions in spending by consumers, who account for two-thirds of economic activity, were offset by weaker growth in exports. Economists believe GDP growth could top 10 percent in the current April-June quarter. “When provided with the ability to spend in a safe way, consumers have the will and the desire to do so,” said Lydia Boussour, lead US economist for Oxford Economics. Many economists are forecasting the economy will grow between 6 percent and 7 percent this year, which would be the strongest performance since a 7.2 percent surge in 1984, another year when the economy was recovering from a deep recession. But Oxford Economics is forecasting growth this year of around 7.7 percent. That would be the strongest annual gain since 1951. The 6.4 percent first-quarter performance represented an improvement after GDP growth slowed to a 4.3 percent rate in the final three months of last year, a time when rising coronavirus cases and waning government support raised fears that the country could tip back into recession, but passage of nearly $3 trillion in extra government support in December and March, as well as widespread introduction of vaccines, has allowed thousands of businesses to reopen and millions of people to go back to work; however, those areas of stronger growth were offset by weakness in US export sales, which fell at an annual rate of 2.9 percent, larger than the 1.1 rate of decline reported a month ago. While exports were falling, imports were rising with the US economy emerging from the pandemic recession more quickly than many other parts of the world. With strong demand from US consumers, imports rose at a 6.7 percent annual rate in the first quarter. The trade deficit, the gap between imports and exports, widened in the first quarter and subtracted 1.2 percentage points from overall growth. Business inventories were also drawn down in the first quarter as companies were not able to keep up with rising demand. The drop in inventories subtracted 2.788 percentage points from first-quarter growth; however, that should translate into stronger growth in the second quarter as businesses work to restock empty store shelves....."


Time to check the June jobs report:

"The number of Americans applying for unemployment benefits fell for the sixth straight week as the US economy reopens rapidly after being held back for months by the coronavirus pandemic. The pandemic brought economic activity to a near-standstill in March 2020. Once again, state officials in Massachusetts said that due to a “system processing error,” initial claims data for regular unemployment benefits for last week and the week prior are “estimated values” based on data reported to the Employment and Training Administration. The state said the corrected values will be provided when they are available. Businesses are reopening rapidly as the rollout of vaccines allows Americans to feel more comfortable returning to restaurants, bars and shops....."

The $uffered $ticker $hock once they got out there (as predicted for months here):

"Consumer prices rose in May at the fastest rate since 2008, a bigger jump than economists had expected and one that is sure to keep inflation at the center of political and economic debate in Washington. Prices are rising for many goods and services, as varied as airfares and used cars, the result of bottlenecks and strong consumer demand as a pandemic-stricken economy comes roaring back. Government officials and many economists have said much of the jump is likely to fade with time as the economy gets past a reopening bounce and supply catches up to demand, but the stakes are high on both Wall Street and Main Street and investors were unmoved by the inflation data, suggesting they had already penciled in higher prices and did not think the data fundamentally changed the outlook for Fed policy. Outside of the base effect, the recent pop in consumer prices has been driven by two big trends. The economy is reopening from a global pandemic shutdown for the first time ever, and critical materials are in short supply as manufacturers try to ramp up production. Many households are flush with cash to spend after multiple stimulus checks and months in lockdown, and that has been goosing consumer demand. The pandemic era has been a wild ride for Yoram Weinreich, a founder of a furniture company called Simpli Home that sells dining room tables and TV consoles both direct-to-consumer and via online retailers Wayfair and Amazon....."

What's in your wallet?

The Globe a$$ures us it is only temporary:

"Have no fear: This inflation is temporary" by Larry Edelman Globe Columnist, May 12, 2021

Close to 60 percent of people in the United States are under age 45 — too young to really remember the last time the cost of living got out of control.

That was near the end of the 1970s, when consumer prices spiraled so high that the only way to bring them down was for the Federal Reserve to jack up interest rates above 20 percent. The Fed succeeded, but the toll was a painful recession that threw millions of people out of work.

On Wednesday, the government released its latest report on inflation, and there were certainly some eye-popping price spikes, but this won’t be a repeat of that ‘70s show. There’s no need to cash out your retirement account and put everything into inflation hedges like gold or bitcoin. The Fed isn’t about to cut off the flow of cheap money that’s buoyed financial markets since the Great Recession.

Most people who study the economy for a living said that the sharp pickup in prices reported for April will last months, not years. Inflation will heat up as the economy takes off following the pandemic, they said, then settle back to a rate that’s higher, but actually healthier, than we’ve seen in a long time.

“This is transitory,” said Joel Prakken, chief US economist at IHS Markit. “Not only will these inflationary pressures abate, they will reverse.”

Last month’s surge was fueled by temporary factors: a burst of consumer spending following the easing of pandemic restrictions, and a shortage of some goods, especially computer chips, as suppliers struggled to keep up with exploding demand; moreover, many of the price increases, in particular on energy products, were skewed in comparison with April 2020, when inflation was tamped down artificially by COVID shutdowns.

This is good news! We are making up for lost spending, helped by those stimulus checks, and that’s pushing up prices for everything from airline tickets to restaurant meals to haircuts after demand for them dried up. The supply disruptions, though challenging, should ease in coming months.

Nonetheless, Wall Street is freaking out.

Investors erased more than $1 trillion in market value from US stocks on Wednesday, a drop of more than 2 percent in the Wilshire 5000 that was the steepest since February. Too much inflation is bad for stocks because it erodes the value of future profits and increases pressure on the Fed to boost interest rates.

“That’s the No. 1 risk our clients raise with us,” said Rhea Thomas, senior economist at Wilmington Trust. “Can the Fed keep the inflation genie in the bottle?”

How much inflation is too much?

If prices continued to climb by 4 percent into next year, it would almost certainly force the central bank to act.

Fed chairman Jerome Powell has said officials don’t plan to begin tightening credit at least until inflation exceeds 2 percent for a sustained run and the unemployment rate falls to where it was before the pandemic.

Central bankers don’t think that will happen before 2024, and private forecasters mostly agree. They see the consumer price index expanding by about 2.6 percent over the course of this year and 2.2 percent in 2022 and 2023. Those estimates probably will move higher following Wednesday’s report, but not by enough to dramatically speed up the Fed’s plans.

Also not factored into forecasts is the potential impact of President Biden’s two big stimulus packages: $2 trillion for infrastructure and climate-change mitigation, and $1.8 trillion in aid to families, including free child care and community college tuition. If passed by Congress, spending of that magnitude would likely juice inflation.

On Wednesday, Republicans used the April inflation data as a warning, implying that big-spending Democrats were hurting ordinary Americans.

“Those numbers we heard today on inflation that should terrify every American, because it’s not a question of whether there’s going to be a tax increase, you just had the biggest tax increase you had in 10 years and it hit you already,” said House minority leader Kevin McCarthy. “And for those who have lower income, it’s getting hit harder.”

That may be good politics, but it’s lousy economics. McCarthy conveniently ignored the years of low inflation that kept goods and services more reasonable.

Listen instead to people like Thomas, the Wilmington Trust economist. She’s in the camp that doesn’t see inflation as a threat, but she’s keeping a close eye on wages, which are fairly stable, and housing costs, which are on a tear. Both are important drivers of inflation.

On the other side of the equation, productivity gains and globalization are key trends to keep tabs on. Both work as a counterbalance to wage inflation, and she’s tracking consumer expectations for inflation. That’s because if people think rising prices will be a problem, they will spend more now before they get even higher. That increased demand, in turn, can push prices up more.

“It’s a feedback loop that can be self-fulfilling,” Thomas said.....


"Weekly jobless claims fell to a pandemic low for the third consecutive week, the Labor Department reported Thursday, with 553,000 Americans filing for initial unemployment benefits in the week that ended April 24. While claims remain elevated (in 2019, average weekly initial claims hovered around 218,000), the trajectory signals that growing vaccination numbers, loosening business restrictions, and warmer weather are helping to heal the jobs market. Signs of a brightening outlook are myriad, but there’s still a long way to go. Meanwhile, poverty rose to 11.7 percent in March, the highest level of the pandemic, according to research from the University of Chicago and the University of Notre Dame, as Americans awaited the next round of stimulus relief. Many economists describe the recovery as ’'K-shaped’' because of its diverging prospects for the rich and the poor, but the divide is also splintering across gender lines......"

Get your shot yet?

Co-worker won't need it:

"Hiring troubles prompt some employers to eye automation and machines" by David J. Lynch Washington Post, May 19, 2021

The United States today is producing roughly the same amount of goods and services as before the coronavirus pandemic — but with 8.2 million fewer workers, equal to the combined payrolls of every employer in Virginia, Arizona, and Iowa. 

Greater productivity is the rare silver lining to emerge from the crucible of COVID-19. The health crisis forced executives to innovate, often by accelerating the introduction of industrial robots, advanced software, and artificial intelligence that reduced their dependence upon workers who might get sick.

Even as millions of Americans remain jobless, retailers, food processors, energy producers, manufacturers, and railroads all are stepping up their use of machines. Automation may also get a lift from President Biden’s infrastructure plan, which will encourage domestic investment in cutting-edge factories, according to Bank of America. 

[The totalitarian technological tyranny the "conspiracy theorists" warned about is being "stepped up"]

Employers’ embrace of automation has survived the economy’s move from recession to rebound and is getting new life now that many companies are struggling to attract enough workers to meet surging demand. 

That attitude has been a boon to companies such as Seegrid, a privately held maker of autonomous forklifts based in Pittsburgh, which saw revenue double last year.  “Business is good. I’m bullish on this year and the next five years,“ said chief executive Jim Rock.

Greater automation helped US companies navigate the unprecedented disruption of the pandemic. Adjusted for inflation, US productivity has risen by almost 4 percent since the fourth quarter of 2019, nearly twice the increase in output-per-worker over the past five quarters, according to the Bureau of Labor Statistics.

“During the pandemic, firms became more productive and learned to do more with less,“ Patrick Harker, president of the Federal Reserve Bank of Philadelphia, said this week.....

[I need to learn how to dos that for these posts are much too long]


"The number of Americans seeking unemployment benefits fell last week to 473,000, a new pandemic low and the latest evidence that fewer employers are cutting jobs as consumers ramp up spending and more businesses reopen. With hiring up, vaccinations increasing, and the economy accelerating, consumers have grown more confident and, on average, are flush with cash after limiting their spending during the pandemic. Stimulus checks have also bolstered many bank accounts. Now, more Americans are venturing out to shop, travel, dine out, and congregate at entertainment venues. The reopening has proceeded so fast that many businesses aren’t yet able to staff up as quickly as they would like. Economists monitor weekly jobless claims for early signs of where the job market is headed. Since the pandemic, though, these numbers have become a less reliable barometer than they normally are. States have struggled to clear backlogs of unemployment applications. And suspected fraud has clouded the actual volume of job cuts. In April, employers added 266,000 jobs, far fewer than expected and a sign that some businesses struggled to find enough workers. The surprisingly low gain raised concerns that businesses may find it hard to hire quickly as the economy keeps improving and that regaining pre-pandemic employment levels could take longer than hoped....."

I'm glad I didn't get mine up.