More Americans out of work makes the need for stimulus even more urgent

While the insurrection trial in the Senate is (rightfully) getting the big attention, we need to remember that major economic problems are still going on as well. That was reiterated again in today's unemployment claims report.

Not only did new "regular" unemployment claims remain high, at 793,000, but the week before was revised up from 779,000 to 812,000. And while the 4-week average declined because the huge jump in mid-January went away from the number, we still are at a higher amount of new claims than we were seeing 3 months ago.

But the bigger story may be with the continuing claims.

NEWS: The US has 20.4 million people receiving unemployment benefits -- a sign of ongoing hardship and lack of job opportunities.

1.1 million *new* unemployment applications were filed last week (UI + PUA) as job losses continue.

Nearly 5 million are on long-term unemployment pic.twitter.com/FR9IJ917vY

— Heather Long (@byHeatherLong) February 11, 2021

That's the first time we've been above 20 million continuing claims since November, and the recently-extended PUA and 26+ week unemployment programs are the reason why.

Notice that decline at the start of January and compare it to the spike we saw 3 weeks later (the last week measured for continuing claims in these programs). That decline is the week after the original PUA and PEUC programs ended in CARES, and Donald Trump waited until the following day to sign the stimulus bill that revived both programs. This caused confusion from beneficiaries, which likely delayed them from filing claims. And it seems likely that we are seeing some of those claims "catch up", causing the big jump last week.

But given what Federal Reserve Chair Jay Powell indicated this week, those 20 million on unemployment may indeed reflect something very bad. Powell said that the "official" unemployment rate isn't accounting for many Americans that are out of work.

The real unemployment rate in the U.S. is closer to 10 percent, Federal Reserve Chairman Jerome Powell said Wednesday, after misclassification errors are factored in to the official government figure. The current unemployment rate, as reported by the Bureau of Labor Statistics last week, is 6.3 percent.

"We are still very far from a strong labor market whose benefits are broadly shared," Powell said, in a virtual speech for the Economic Club of New York on the state of the labor market. "The pandemic has led to the largest 12-month decline in labor force participation since at least 1948," he said....

"The Bureau of Labor Statistics reports that many unemployed individuals have been misclassified as employed," Powell said. "Correcting this misclassification and counting those who have left the labor force since last February as unemployed would boost the unemployment rate to close to 10 percent in January."

If so, then things are truly dire for a large number of Americans, and President Biden's economic rescue package needs to get through Congress and get signed sooner than later.

Especially the parts that allow for expanded benefits and survival checks, as many Americans are still struggling to find work and keep jobs 11 months after COVID first started hitting the overall US economy. Those people need all the help they can get, so they can keep paying their bills, and keep the economic damage from spreading beyond the hard-hit service sectors that have been battered in the COVID World.