Layoffs, quits hamper job market recovery
Layoffs and quits continue to dog California’s job market.
Workers in California filed 67,200 initial claims for unemployment benefits for the week ending Oct. 9, an increase of 3,200 from the 64,000 claims filed in the week ending Oct. 2, the U.S. Labor Department reported Thursday.
In January and February 2020, the final two months before state and local government agencies ordered lockdowns to curb the spread of the deadly coronavirus, unemployment claims averaged 44,800 a week in California.
The 67,200 jobless claims filed last week in California were 50% higher than the average reported in early 2020.
The U.S. number of claims fell to its lowest level since the pandemic began, dropping 36,000 to 293,000, the second straight drop.
That’s the smallest number of people applying for benefits since the week of March 14, 2020, when the pandemic intensified, and the first time claims have dipped below 300,000.
The decline in layoffs comes amid an otherwise unusual job market. Hiring has slowed in the past two months, even as companies and other employers have posted a near-record number of open jobs. Businesses are struggling to find workers as about 3 million people who lost jobs and stopped looking for work since the pandemic have yet to resume their job searches. Economists hoped more people would find work in September as schools reopened, easing child care constraints, and enhanced unemployment aid ended nationwide.
The Labor Department said earlier last week that quits jumped to 4.3 million in August, the highest on records dating back to December 2000, and up from 4 million in July.
IMF sees risk of sudden sell-offs in stocks, housing market
The International Monetary Fund warned of the risk of sudden and steep declines in global equity prices and home values as the Federal Reserve and other central banks withdraw the support they’ve provided during the pandemic.
Ultra-easy monetary policy has led to “pockets of market exuberance and rising financial leverage” that could unwind in disorderly ways and put the economic recovery at risk as credit tightens, the IMF said on Tuesday in its semiannual Financial Stability Report.
“Shocks could be coming from the central banks themselves because they’re tightening more quickly than previously anticipated,” Tobias Adrian, director of the Monetary and Capital Markets Department at the IMF, said in an interview. “We worry that we could see a sell-off of sizable magnitude, given the level of stretched valuations.”
Complicating the central banks’ calculus, he said, is the emergence of inflation pressures “unlike anything we’ve seen before.”
While the IMF agrees with the Fed and other central banks that the burst of inflation will likely prove temporary, “there’s quite a bit of uncertainty” around that forecast, Adrian said. That raises “some question marks” about how policymakers would respond to a financial market meltdown.
Poll: 20% of U.S. households lost entire savings during pandemic
For many Americans, coronavirus lockdowns — with nowhere to go and nothing to do — were a time to save. But for almost 20% of U.S. households, the pandemic wiped out their entire financial cushion, a poll released Tuesday finds.
The share of respondents who said they lost all their savings jumped to 30% for those making less than $50,000 a year, the poll from NPR, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health finds. Black and Latino households were also harder hit. The researchers surveyed a nationally representative sample of 3,616 U.S. adults ages 18 or older.
Avenel Joseph, a vice president at the Robert Wood Johnson Foundation, said many people dipped into their savings to cover child or health care expenses. “When crisis hits, or anything goes out of the norm — your child is sick, for example — you are sacrificing wages,” she said. Almost twothirds of households earning less than $50,000 a year said they had trouble affording rent, medical care and food.
About two-thirds of people surveyed said they received financial assistance from the government in the past few months. But 44% said those programs only “helped a little.”