Today's Indicators

by Dollars and Sense

Most are covered in this NYT piece. It mentions a surprise jump in first-time unemployment claims and a strong bounceback by the Shanghai Composite Index, which has lost some 20% of its value in the last couple of weeks.

Calculated Risk has this update on 2Q mortgage delinquencies.

Regarding the situation in China, comments in FT Alphaville and the FT itself elucidate the bounceback a bit.

Finally, the Philadelphia Index of Manufacturing Activity unexpectedly expanded in August for the first time in a year.

Labels: China, economic indicators, mortgage market, Philadelphia Manufacturing Index, unemployment benefits, unemployment rate

 

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8/20/2009 09:47:00 AM 0 comments

 

Official Unemployment Numbers Grim

by Dollars and Sense

The latest official unemployment numbers from the Labor Department show continuing deterioration in the job market, setting a record for the ninth straight week.

Seasonally adjusted first time claims for unemployment insurance rose by 8,000 to 652,000, compared to 367,000 a year ago.

The total number of people claiming benefits for more than a week increased by 122,000 to 5.56 million, the highest total since record-keeping began in 1967. This number a year ago was 2.8 million. Adding in the people that are receiving extended unemployment benefits under a special program approved by Congress brings the total to 7.03 million.

The official unemployment rate is now at 8.1%, the highest in 25 years.

Long-term jobless claims have jumped by over 100,000 four times in the past five weeks, indicating that companies continue to shed workers at a rapid rate.

Again, these are the official numbers. As grim as they are, a more accurate assessment would give us an unemployment rate of 14.8% for February. This is from the Bureau of Labor Statistics' "U6" category that includes "Total unemployed, plus all marginally attached workers,* plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers."

*Marginally attached workers are "people who are neither working nor currently looking for work but indicate that they want and are available for a job and have looked for work at some time in the recent past," according to Steve Haugen, an economist at the Bureau of Labor Statistics.

One out of every eight workers.

Labels: unemployment, unemployment benefits, unemployment insurance

 

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3/26/2009 01:14:00 PM 0 comments

 

Jobless Hit with Bank Fees on Benefits

by Dollars and Sense

Here's another one that I have been meaning to post for a while. I haven't seen this anywhere else, so maybe you haven't either.

Bank of America is particularly egregious, imho. A few examples: although I am not among the "unbanked," I can identify with them, since sometimes I am close enough to living paycheck-to-paycheck that I need money fast and can't wait for a check to clear at my bank. The bank I use is a locally-owned one (Cambridge Trust), but my (other) employer, Harvard University, pays me in two lump sums twice a year drawing on Bank of America.

The BoA branch in Harvard Square has appalled me for many years. Over the past few years (ten or so) Harvard Square, formerly chocked full of locally-owned businesses, independent bookstores, coffee shops, etc. (does anyone else remember The Tasty?) has been repopulated by high-end chains, cellular phone stores, and ATMs. Sometime in this period, the Harvard Square BoA branch remodeled itself so that the street-level part of the branch, gleaming with marble and flat-screen TVs with stock-tickers, is reserved for—I'm not sure for whom, but I'm assuming big-account investors (with huge banks of ATMs, too, of course). Anyone who wants to go to a teller has to go downstairs into a dingy and low-ceilinged space reminiscent of a welfare office.

Last fall when I went to cash my twice-yearly paycheck from Harvard, not only did I have to go to the dingy downstairs, but the teller informed me that I would have to pay a $6 fee. For BoA to cash a check drawing on a BoA account. A check made payable to me, not to BoA. Since I really needed the money, I reluctantly agreed. Then the kicker: the teller pointed to a small black ink pad. They needed my fingerprint before they would cash my check. "It's for security," I was told. Apparently all this is legal. When I went to deposit my cash at my own bank, I told the teller about my experience. She was appalled. "That check was payable to you," she said.

(More recently, I've noticed that at least some BoA ATMs charge an outrageous $3 for out-of-network users.)

BoA (and the other big banks) are still following a profit model that involves leeching huge amounts of money, bit by bit, from the "unbanked" and the semi-banked. The big banks want a piece of the huge payday loan and check-cashing industry (which they themselves fund), and they are able to get it because so many people are locked out of mainstream banking, or are otherwise living on a financial edge. (For background on the big "respectable" banks' role in the "fringe economy," see this article from D&S a couple of years ago.)

Anyhow, this article from the Associated Press shows how such practices might fit into BoA's model for returning to profitability:

Jobless hit with bank fees on benefits

By CHRISTOPHER LEONARD | AP Business Writer | Fri Feb 20

For hundreds of thousands of workers losing their jobs during the recession, there's a new twist to their financial pain: Even as they're collecting unemployment benefits, they're paying bank fees just to get access to their money.

Thirty states have struck such deals with banks that include Citigroup Inc., Bank of America Corp., JPMorgan Chase and US Bancorp, an Associated Press review of the agreements found. All the programs carry fees, and in several states the unemployed have no choice but to use the debit cards. Some banks even charge overdraft fees of up to $20 — even though they could decline charges for more than what's on the card.

"It's a racket. It's a scam," said Rachel Davis, a 38-year-old dental technician from St. Louis who was laid off in October. Davis was given a MasterCard issued through Central Bank of Jefferson City and recently paid $6 to make two $40 withdrawals.

The banks say their programs offer convenience. They also provide at least one way to tap the money at no charge, such as using a single free withdrawal to get all the cash at once from a bank teller. But the banks benefit from human nature, as people end up treating the cards like all the other plastic in their wallets.

The fees are raising questions from lawmakers who just recently voted to infuse banks with taxpayer money to keep them afloat.

Rep. Carolyn Maloney, D-N.Y., a member of the House Financial Services Committee, said the situation points to "yet another example of how we need to regulate the ways in which banks charge overdraft and other fees."

Read the rest of the article.

(By the way, does anyone else wish that Carolyn Maloney had been NY Gov. Patterson's pick to replace Hillary Clinton? I don't know much about her, but I like what I've heard.)

Labels: Bank of America, banking crisis, banking regulation, Harvard University, unemployment, unemployment benefits

 

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3/16/2009 10:10:00 AM 4 comments

 

US Jobless Claims At Record High

by Dollars and Sense

The US shed 600,000 jobs in January alone. It's looking like we'll lose another 700,000 in February. From the wires:

WASHINGTON (Reuters) - The number of U.S. workers drawing jobless aid jumped to a record high in mid-February, while the recession undercut demand for manufactured goods last month and sent new homes sales to their lowest since 1963.

The worsening global economic slump pushed new orders for long-lasting U.S. manufactured goods to a six-year low in January. The housing market, at the center of the downturn, continued to slow and sales of new home hit a record trough in January, according to government reports on Thursday.

"We are deteriorating about as fast as we can, the data today were pretty catastrophic. The economy is going to continue to contract, probably at least until the middle of the year," said Stephen Stanley, chief economist at RBS Greenwich Capital Markets in Greenwich, Connecticut.

Companies are cutting staff to lower costs as demand slumps and banks limit access to credit. However, rising unemployment is sapping consumer spending and piling pressure on an economy wallowing in a 14-month recession.

...

The number of people remaining on the benefits roll after drawing an initial week of assistance increased by 114,000 to a record 5.11 million in the week ended February 14, the most recent week for which data is available, the Labor Department said.

Initial claims for state unemployment insurance benefits increased to a seasonally adjusted 667,000 last week from 631,000 the prior week, the department said. It was the highest reading since October 1982.

The surge in weekly applications for unemployment benefits implied February's jobs report could show a decline in payrolls in excess of 700,000, according to some economists.

"It's getting uglier by the day. According to our model estimate, the recent surge in initial jobless claims signals a decline in February payrolls of about 750,000," said Harm Bandholz, an economist at Unicredit Markest & Investment Banking in New York.

Payrolls declined by nearly 600,000 in January, the largest drop since 1974.

Full story here.

Labels: economic meltdown, unemployment, unemployment benefits

 

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2/26/2009 05:28:00 PM 0 comments

 

Companies Fighting Unemployment Claims

by Dollars and Sense

From the Washington Post:

Out of Work and Challenged on Benefits, Too
In Record Numbers, Employers Move to Block Unemployment Payouts

It's hard enough to lose a job. But for a growing proportion of U.S. workers, the troubles really set in when they apply for unemployment benefits.
More than a quarter of people applying for such claims have their rights to the benefit challenged as employers increasingly act to block payouts to former workers.

The proportion of claims disputed by former employers and state agencies has reached record levels in recent years, according to the Labor Department numbers tallied by the Urban Institute.

Under state and federal laws, employees who are fired for misbehavior or quit voluntarily are ineligible for unemployment compensation. When jobless claims are blocked, employers save money because their unemployment insurance rates are based on the amount of the benefits their workers collect.

As unemployment rolls swell in the recession, many workers seem surprised to find their benefits challenged, their former bosses providing testimony against them. On one recent morning in what amounts to one of Maryland's unemployment courts, employees and employers squared off at conference tables to rehash reports of bad customer service, anger management and absenteeism.
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"I couldn't believe it," said Kenneth M. Brown, who lost his job as a hotel electrician in October.

He began collecting benefits of $380 a week but then discovered that his former employer, the owners of the Gaylord National Resort and Convention Center, were appealing to block his unemployment benefits. The hotel alleged that he had been fired for being deceptive with a supervisor.

"A big corporation like that. . . . It was hard enough to be terminated," he said. "But for them to try to take away the unemployment benefits -- I just thought that was heartless."

After a Post reporter turned up at the hearing, the hotel's representative withdrew the appeal and declined to comment. A hotel spokesperson later said the company does not comment on legal matters. Brown will continue to collect benefits, which he, his wife and three young children rely on to make monthly mortgage payments on their Upper Marlboro home.

Rest of the story here.

Labels: Corporate Fraud, unemployment, unemployment benefits, unemployment insurance

 

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2/12/2009 01:55:00 PM 0 comments

 

Unemployment Insurance Running Out

by Dollars and Sense

UPDATE 6:31 PM:

Responding to the massive public outpouring as a result of our earlier blog post, Congress rushed through an emergency 13-week extension of jobless benefits. President Bush is expected to assign the legislation immediately.

Original post from 2:23 PM:

According to the latest Economic Snapshot by the Economic Policy Institute (EPI), the massive spike in jobless claims coincides with the expiration of unemployment benefits for millions.

From EPI:

Over 890,000 unemployed workers already have exhausted their 13-week extension, and another 1.2 million are projected to exhaust benefits by year's end.3 Without these benefits, the Congressional Budget Office finds that about 50% of the long-term unemployed fall under the poverty line.4 Congress should act swiftly to extend benefits for another seven weeks in all states, and an additional 20 weeks (for a total of 33) in states with unemployment over 6.0%.

Labels: EPI, unemployment, unemployment benefits

 

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11/20/2008 02:23:00 PM 1 comments

 

Victory on unemployment insurance!

by Dollars and Sense

This just in from our friends at the Economic Policy Institute:

After months of campaigning by EPI and allied groups, Congress finally enacted a 13-week extension of unemployment benefits in all 50 states and the District of Columbia. The veto-proof June 27 vote is expected to help more than 3 million unemployed workers who otherwise would have exhausted their benefits over the next nine months, and to provide a needed boost to hard-hit local economies. The vote also signals an understanding by members of Congress that the current economic downturn is serious and requires ground-level intervention.

EPI started agitating for the extension in December, when talk of a recession was just emerging. Since then, the Institute has been at the forefront of the campaign, with staff members providing testimony, giving media interviews, writing op-eds and blogs, and conducting research showing that rates of long-term unemployment were already high enough to warrant action. Benefits run out after 26 weeks in most states.

In early June, two weeks before the final vote, EPI urged its email subscribers to contact members of Congress. As EPI Vice President Ross Eisenbrey wrote in the alert, it was time to stop blaming the jobless for their plight. "There are now only 3.7 million job vacancies but 8.5 million unemployed looking for work," Eisenbrey noted. "The fault is not with the jobless; the problem is a failing economy and the government's failure to turn it around."

Labels: Economic Policy Institute, unemployment, unemployment benefits, unemployment insurance

 

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7/03/2008 02:17:00 PM 0 comments