THE DATA IS NOT NEFARIOUS; ITS REPUTATION IS!


It can be said that the mathematics on the number of unemployed looks reasonable. Back in the late sixties, during the time the jobless rate was 4.0% the number of statistically unemployed averaged about 2.8 million; in the last couple of years the average for this group was just over 6 million, so a bit more than double, which jives with the difference in the labour force during those times. The questionable Weekly Claims comparison comes in part from the percentage of statistically unemployed people who receive jobless benefits. Back in 1967 through 1969, about 40% of the unemployed were on the program, classified as being on Continuing Claims. However, since 2010, aside from the volatile period during and just after the Pandemic, the average percentage of unemployed people who get jobless benefits has been about 27%. The percentage who received benefits fifty-some years ago is 50% higher than it is now. Remember, jobless benefits are essentially a State program, administered by the Feds. The Great Recession left many State budgets in a shamble. One of the areas that States cut back on, was reducing the unemployment benefits themselves and also making the benefits more difficult to get.


An analyst at the Department of Labor (DOL) explained to me that some States have gone a step further and reduced the duration of the benefits on a sliding scale, depending on the Unemployment Rate; the lower the Rate, the shorter the time that the benefits last, often less than half the unadjusted time. The DOL analyst said that the increasing difficulty in getting on the program was partially responsible for the reduced participation. In addition, he said that the current payments, which vary by State, are most often much lower than they were back in the 1960s on an inflation adjusted basis. Therefore (…he said…), the DOL notices that people often don’t bother to apply because of that combination of factors. Some States have been so effective in their efforts to cut down their spending on jobless benefits that only about 5 or 10% of unemployed get assistance in Florida, North Carolina and others as well. The analysts also suggested a shift in the kinds of jobs that exist now, that were not around in the 1960s, probably plays a role in the skew of the participation in the unemployment benefits programs between now and fifty-some years ago. For instance, those who work in ride share or delivery services, or are self-employed in some other manner today, do not qualify for jobless benefits; whereas years ago the jobs they worked would likely have given them the option of getting unemployment relief.


THE DATA IS NOT NEFARIOUS; ITS REPUTATION IS! Weekly claims at 210k is really not the same thing as 210k in 1969.


There…itch, scratched! Lou Brien


E: lbrien@drwholdings.com


Lou Brien is Strategist / Knowledge Manager at DRW Trading in Chicago. Lou has been at DRW Trading since 1999 and in the markets since 1983.


21 | ADMISI - The Ghost In The Machine | Q1 Edition 2024


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