12.17.2020 0

Unemployment claims up almost a million in a week as lockdowns intensify

Pray the vaccine works, or this is only the beginning of the Covid depression.

By Robert Romano

As predicted, with Covid virus cases rising as the cold and flu season starts peaking, the U.S. economy is once again shedding jobs at a fairly rapid clip, with 935,000 more Americans filing initial unemployment claims the week of Dec. 12 amid state and local economy lockdowns according to data compiled by the Department of Labor.

That makes for more than 2.6 million initial claims the past three weeks, but this might be offset by those on continued claims who then found jobs. On the other hand, it could be they lost their benefits because they finally ran out. The length of benefits varies state by state. It’s usually not longer than six months, and the pandemic began more than six months ago, so…

For example, the week of Dec. 5, there were 956,000 initial claims, but continued claims actually dropped by 312,000 to 5.49 million.

That might mean 1.2 million jobs were created that week. Or it could mean 1.2 million Americans’ long-term unemployment benefits ran out. I suspect the answer falls somewhere in between but closer to the latter, with significant job losses in December, perhaps in the millions, as the country rapidly falls into a double-dip Covid recession.

This differs from the robust recovery that began in May and persisted all the way through November, with more than 16 million jobs recovered after 25 million were lost between February and April.

We’ll know more when the monthly jobs numbers get released in January, but that’s what my gut tells me. In the meantime, Congress continues inching towards a deal on economic stimulus in response to the state-led closures.

I believe we’re headed back toward another recession because earlier this year, the biggest predictor of jobs losses was the amount of Covid cases.

While cases were rising, businesses were closing and laying people off. When cases dropped, that’s when the jobs were recovered. I suspect the same thing will happen here, perhaps even more dramatically than last time, since there appear to be far more cases than last spring.

Confirmed cases nationwide is topping 245,000 a day, while projected probable cases by the Institute of Health Metrics and Evaluation is topping 417,000 a day. Those are record highs.

In California, confirmed cases has skyrocketed to more than 60,000 a day, the same as probable cases.

In New York, confirmed cases are up to about 10,000 a day, and probable cases are said to be about 17,000 a day.

That makes the vaccine approvals by the Food and Drug Administration incredibly important and now it is a race against time to get the vaccine distributed by the federal government and these drug companies. With Operation Warp Speed, millions of vaccines have already been purchased and are presently being distributed to front-line medical personnel and the military, who will then be administering it to the general population.

Even New York Democratic Gov. Andrew Cuomo is full throttle on getting the vaccine to New Yorkers after suggesting that distribution of the vaccine prior to the end of the year would be “political.” Now Cuomo says he wants to “instill public confidence” in New Yorkers to take the vaccine: “We want to be the first COVID-free state and that means remaining diligent. It’s about logistics, and supply, and most importantly it’s about public education and access. Remember, we need to have 75 to 85 percent of the population vaccinated to actually win this war. That’s why we have not only launched the Vaccinate New York campaign and website to help instill public confidence in the vaccine, but we also have taken steps to ensure no New Yorker will have to pay a penny to get vaccinated. New Yorkers have already paid more than their fair share for COVID, but by staying united, tough and smart, we will reach the light at the end of the tunnel.”

This contradicted remarks Cuomo made on Nov. 17, promising he and other blue states will slow up distribution of the vaccine even after it is approved, stating, “nobody is going to trust him saying it’s a safe vaccine. But you’re going to see this play out, they’ll do what’s called an emergency authorization by the FDA… I think that could happen as soon as January where the FDA, because Trump will push them, will say we authorized the drug for emergency use, and you could see it starting in January before Biden gets into office and that’s why I’m pushing so hard to make sure that we have a process in place to check what the FDA says before people start getting the vaccine in New York.”

That followed Cuomo’s statement on Nov. 9 that, “We can’t let this vaccination plan go forward the way that Trump and his administration is designing it.” Fortunately, now New York does not appear to be trying to slow down distribution — the key to ending the pandemic.

But the vaccine distribution is far from complete. And so that means states will continue locking down until there is some evidence herd immunity is taking root.

That makes the vaccine, and whether it is effective, not only the key to saving as many lives as possible — but to whether the U.S. economy and our country will ever be able to fully reopen again any time soon. Pray the vaccine works, or this is only the beginning of the Covid depression.

Robert Romano is the Vice President of Public Policy at Americans for Limited Government.

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