Jobless claims increase to 898,000, a sign the recovery could be stalling

The number of new unemployment claims jumped last week, the latest sign of the toll the coronavirus pandemic continues to take on the economy.

States across the country processed 898,000 new unemployment claims, up more than 50,000 from the previous week, the largest increase in first-time jobless applications since August.

These numbers marked another unfortunate milestone: The number of unemployment claims has been above the pre-pandemic one-week record of 695,000 for 30 weeks now.

Claims for Pandemic Unemployment Assistance, for gig and self-employed workers, went down, to 373,000 from about 460,000.

And the total number of people on all unemployment programs dropped slightly, to 25.3 million for the last week of September, down from 25.5 million the previous week.

The number of new claims has fallen greatly from its peak in the spring, but economists say they are concerned that the number remains so high.

“No question this report casts doubt on the recovery,” said Andrew Chamberlain, the chief economist at Glassdoor. “This is a sign covid is still dealing heavy blows to the labor market. We’re nowhere near having the virus under control.”

The news comes amid a string of poor economic news, with headlines punctuated with reports of large companies announcing layoffs in recent weeks.

These companies include Disney, insurance company Allstate, American and United Airlines, Aetna, and Chevron.

“It’s not coming down quickly,” said Julia Pollak, a labor economist at the jobs site ZipRecruiter. “It’s unclear how quickly we can recover. We’re likely to see additional layoffs and high numbers of unemployment for the foreseeable future.”

Pollak said there are indications that consumer spending has fallen since the expiration of government aid programs — another warning sign about more economic trouble ahead.

Many economists, including those at the Federal Reserve, have urged Congress and the White House to pass a new package of aid. House Democrats passed a $2.2 trillion plan earlier this month that Republicans have declined to advance, while Treasury Secretary Steven Mnuchin has been pushing a $1.8 trillion plan.

Still, there are signs that Senate Republicans would not be willing to accept that plan, either. Senate Majority Leader Mitch McConnell told reporters that he would not bring the plan to the floor, saying Senate Republicans believed the deal should top out at $1.5 trillion.

One sign of the severity of the economic crisis is the growing number of people who are transitioning to Pandemic Emergency unemployment compensation — for those who hit the maximum number of time that their state plans allow for. That number grew 818,000, according to the most recent figures, from the end of September.

Questions remain about the integrity of the data, as well.

A number of issues have complicated a straightforward read of the weekly release, such as issues with fraud, which are believed to have driven up these numbers an unknown amount, and backlogs in states like California. The country’s largest state typically accounts for about 20-28 percent of the country’s total weekly claims, but has put its claims processing on hold temporarily.

Instead, the Department of Labor is using a placeholder number for the state — 226,000, the number of new initial claims in the state from mid-September.

But some economists like Chamberlain are critical of this method.

“The idea of cutting and pasting the data from a state is so absurd,” he said. “They could at least use a model. But instead they’re carrying over the number. It’s quite a crisis.”

Quirks in the new filing process require people to apply for traditional unemployment and get rejected before applying for PUA — a source of potential duplicate claims.

Economists have been warning for months that the unemployment rate, which has improved steadily since its nadir in April, is at risk of getting worse without further government intervention.

States that saw significant jumps in unemployment claims last week include Indiana, Alaska, Arizona, Illinois, New Mexico and Washington.

Still, some economists have found reasons to hope. Pollak said job postings on ZipRecruiter have topped 10 million for the first time since the start of the pandemic, equaling a number last seen in January.

The jobs are different now, she said — fewer tech and business jobs and more warehousing jobs, temporary opportunities and contracting work.

America’s most prestigious medical journal makes a political statement

https://mailchi.mp/45f15de483b9/the-weekly-gist-october-9-2020?e=d1e747d2d8

In Rare Step, Esteemed Medical Journal Urges Voters To Oust Trump | KPCW

For its first 208 years, the New England Journal of Medicine has never endorsed a political candidate. But this week the journal published an editorial outlining its political position in the upcoming Presidential election, signed unanimously by all editors who are US citizens.

The editors did not explicitly endorse former Vice President Biden, but rather offered a scathing condemnation of the current administration’s performance during the COVID pandemic: “Reasonable people will certainly disagree about the many political positions taken by candidates.

But truth is neither liberal nor conservative. When it comes to the response to the largest public health crisis of our time, our current political leaders have demonstrated that they are dangerously incompetent. We should not abet them and enable the deaths of thousands more Americans by allowing them to keep their jobs.” (Formally endorsing Biden last month, Scientific American also made the first political endorsement in its 175-year history.)
 
Much of the media coverage of the NEJM statement has centered on the question of whether medicine should involve itself in politics, or “live above it”

Medicine has been drawn into political disputes before, but now the nature of the involvement has changed. In the past, debates largely centered around regulation, payment or policy—but now the science itself has become a fundamentally political issue. 

The very nature of the coronavirus has become a matter of political belief, not just an indisputable scientific fact.

Public trust in both scientific institutions and the government, and their ability to work together, has been damaged. We fear this will lead to poorer health outcomes regardless of who wins the upcoming election.

States are telling some people to pay back unemployment benefits

People getting overpaid in unemployment benefits in multiple states -  Business Insider

Tens of millions of people have been on unemployment at some point in the last seven months, since the pandemic began. Now, thousands are being told they have to pay some or all of that money back, either because they made an error when they applied for benefits, or the state did.

“People are terrified by these messages, and they’re coming in swarms,” said Anne Paxton of the Unemployment Law Project. “We’re hearing about this all the time.”

Many people receiving overpayment notices have already used their benefits to pay for basic living expenses. 

“I don’t have $10,000 sitting around,” said Larson Ross, 25, who got a notice of overpayment from the state of Colorado in late August. “I was a low-wage tea house worker who was unemployed for four months. I was using the money from unemployment for food and rent. So it’s spent.” 

He has no idea what he’s going to do. He’s never been so stressed in his life.

“The few days after I first received the letter I found it really hard to get out of bed at all,” Ross said. “It’s really tough.”

The state of Colorado is telling Larson Ross he has to repay the $10,800 he got in unemployment benefits during the pandemic, after his employer successfully contested his eligibility. He has already spent the money on rent, bills and groceries. (Courtesy Larson Ross)

There are a variety of reasons people might get an overpayment of benefits notice. In Ross’ case, his employer successfully contested his eligibility for unemployment, saying he quit, which he disputes. In some cases, it’s because an applicant misunderstood or mischaracterized something on their application. In other cases, the state may have miscalculated a benefit, or approved an application before verifying all the information. 

While this also happened in pre-pandemic times, the issue is particularly acute now given the historic number of claims that have flooded state unemployment offices since March — and the state of the economy. 

“The circumstances for returning to work are just not the same,” said Kathy White, deputy director of the Colorado Fiscal Institute. “Congress needs to recognize that, and make sure that the systems that they’re putting in place for workers to help them through this time, that are just immediate relief … they cannot be punitive. Coming out of COVID with a $15,000 debt that you cannot repay is not helpful.”

With traditional unemployment insurance benefits and with Federal Pandemic Unemployment Compensation, if someone has been overpaid, states have the discretion to waive repayment, as long as there was no fraud involved — particularly if repayment would cause financial hardship. But that is not the case with Pandemic Unemployment Assistance. Under current federal law, states do not have the authority to waive repayment of PUA benefits if a person was overpaid, according to Michele Evermore of the National Employment Law Project.  

“This is honestly the biggest reason that Congress needs to do something on COVID relief,” she said. “If this issue doesn’t get solved, this is going to be more explosive than people losing the $600 in some ways, because they’ll have to pay back six months of Pandemic Unemployment Assistance. Nobody who qualified for PUA is going to have that much money sitting around.”

Andrew Tolch applied for PUA in the spring, on the advice of both his bank and his accountant, when he had to temporarily close down his toy store in St. Louis, Missouri because of COVID. 

He was approved, and used all the money he got — less than $200 a week in PUA, plus the extra $600 a week in FPUC — to pay utilities and rent for the store. 

Then, over the summer, he got an overpayment notice from the state of Missouri: he owed a big chunk of that money back — $2,376 in total.

“I was shocked, and I didn’t understand it,” he said. “I followed the rules correctly. We should have qualified, and according to the rules they gave us, we qualified.”

When Andrew Tolch had to close down his toy store, Andy’s Toys, in St. Louis this spring, he applied for and got Pandemic Unemployment Assistance. Now, the state of Missouri wants most if it back. (Courtesy Andrew Tolch)

Tolch has since connected with a number of other small business owners in Missouri who also got notices of overpayment, and he said none of them understands why the state is now saying they didn’t qualify for pandemic assistance. They’re considering the possibility of a class action lawsuit

“It will sink a lot of people if they would have to give it all back,” Tolch said. “Just one more blow from 2020 to small businesses.”

People who think they got an overpayment notice in error, or who can’t afford to repay the benefits, can always appeal — and should, according to Eric Salinger, director of the Employment Law Project at Alaska Legal Services.

But for people who do not win on appeal, or do not get a repayment waiver, states can find ways to recoup that money. Some are more aggressive than others, according to Evermore.

“Every state has different recoupment authority,” she said. “In some states, other benefits can be garnished to pay for that. Taxes could be garnished, future wages could be garnished.”

Larson Ross is afraid that will happen to him. He finally found a seasonal job in northern Colorado, and is making enough money to get by this month, at least — as long as the state doesn’t garnish his wages. Then, he doesn’t know. 

Kathy White is hoping that Colorado and other states will use their discretion to waive repayment in cases where there was no fraud, and that Congress will change the law so states can waive overpayment recoupment of Pandemic Unemployment Assistance. 

“It should be just forgiveness for error or overpayment in these unusual circumstances,” she said. “You don’t want to put people in a worse position because of the aid you’re trying to give them.”

Jobless claims: Another 840,000 Americans filed new unemployment claims last week

https://finance.yahoo.com/news/jobless-claims-coronavirus-unemployment-week-ended-october-3-2020-164918818.html

U.S. states saw another 840,000 jobless claims filed last week, as the number of Americans applying for first-time unemployment insurance benefits each week continues to hover at a historically high level.

The U.S. Department of Labor (DOL) released its weekly jobless claims report at 8:30 a.m. ET Thursday. Here were the main metrics from the report, compared to Bloomberg estimates:

  • Initial jobless claims, week ended Oct. 3: 840,000 vs. 820,000 expected and 849,000 during the prior week
  • Continuing claims, week ended Sept. 26: 10.976 million vs. 11.4 million expected and 11.979 million during the prior week

New weekly unemployment insurance claims have held below the psychologically important 1 million mark for the past six consecutive weeks, but have so far failed to break below 800,000 since the start of the pandemic. At 840,000 last week’s new claims remained at a level still handily above the pre-pandemic record high of 695,000 from 1982.

The past two weeks’ jobless claims totals have also been flattered by an absence of updated new claims out of California. The state – which has consistently been one of the biggest contributors to new weekly claims – announced last week it was taking a two-week pause in processing initial claims to “reduce its claims processing backlog and implement fraud prevention technology,” according to the Labor Department’s statement.

Across all programs, the total number of jobless claims decreased for the week ending Sept. 19. Total claims came in at 25.5 million, down from the about 26.5 million during the previous week, as a smaller number of self-employed or gig workers not eligible for regular state programs claimed Pandemic Unemployment Assistance. But the number of workers collecting benefits through the Pandemic Emergency Unemployment Compensation Program – which offers an extra 13 weeks’ worth of federal benefits to those who had exhausted previous state or federal compensation – rose by 154,000 to 1.96 million.

Continuing jobless claims, which are reported on a one-week lag and represent the total number of individuals still receiving state unemployment benefits, continued their gradual downtrend last week. But as with new jobless claims, continuing claims have held well above pre-pandemic levels, and have not broken below the 10 million mark in more than 6 months.

“Net, initial filings fell less than expected last week. The improvement in continuing claims is reflecting people being hired but also individuals exhausting their benefits,” Rubeela Farooqi, chief economist for High Frequency Economics, said in an email. Overall, the signal from the claims data is still one of ongoing weak conditions in the labor market. Even as filings are declining, levels remain extraordinarily high. Employment growth has already slowed and without fiscal support that protected jobs, risks are skewed to the downside for payrolls going forward.”

The latest jobless claims report comes amid dimming hopes for another round of virus relief measures out of Congress, despite increasingly urgent calls from Federal Reserve officials for more fiscal stimulus to support individual Americans more directly.

President Donald Trump said Tuesday he had asked his negotiators to halt further stimulus talks until after the election, but added that he would support standalone measures providing tens of billions of dollars for airline payroll support and the Paycheck Protection Program. House Democrats, however, have previously balked at the notion of passing slimmed down versions of a stimulus package – meaning the prospect of further fiscal stimulus in the next month remains unlikely.

State autonomy versus a fundamental right: VP debate will spotlight divergent healthcare views

https://www.healthcarefinancenews.com/news/vice-presidential-debate-will-likely-spotlight-divergent-views-healthcare

Mike Pence and Kamala Harris take the debate stage Wednesday night. (Kamala (Harris photo by Ethan Miller; Pence photo by Joshua Roberts. Both Getty Images)

The undercurrent of the VP debate is the age and health of the two men vying for the presidency.

The two remaining presidential debates, scheduled for October 15 and 22, are in question due to President Trump’s positive COVID-19 and quarantine status, making the vice presidential debate this Wednesday at 9 p.m. even more important than VP debates of past elections.

The undercurrent in the debate consists of the ages of challenger Biden, who is 77 and turning 78 before the end of the year, and Trump, 74, who has been hospitalized for COVID-19 and was released from Walter Reed Army Medical Center on Monday afternoon. Trump has said he plans to debate Biden on October 15.

This VP debate is big, said Paul Keckley, a healthcare policy analyst and managing editor of the Keckley Report. 

“The reason is not so much the two are debating,” Keckley said. “We have a 77- year-old challenger and a 74-year-old incumbent. Voters are expecting the odds are one will become disabled and the vice president is going to step in. That’s the undercurrent of this debate.”

Healthcare is an obvious dominant theme Wednesday night beyond the health of the two men seeking the presidency. 

It is expected that Biden’s running mate, Kamala Harris will challenge Vice President Mike Pence on his role heading the coronavirus task force when close to 7.5 million people in this country have been infected with COVID-19 and more than 200,000 have died.

Pence will likely challenge Harris on her support for Medicare for All before she backtracked to support Biden’s public-private option for healthcare coverage.

Pence and Harris are expected to lay out the healthcare plans of their respective Republican and Democratic nominees less than four weeks before the election, in a way the lead candidates failed to get across during the first presidential debate that presented more chaos than clarity.

TRUMP AND BIDEN PLANS

Trump and Biden differ fundamentally on whether the federal government should be involved in the business of providing healthcare coverage.

Trump’s guiding principles rest on the pillar of state autonomy as opposed to a federalized healthcare system and Biden’s maxim that healthcare is a right, not a privilege. 

Trump believes that private solutions are better than government solutions, according to Keckley. He is much less restrained on private equity and the Federal Trade Commission’s scrutiny of vertical integration. States become the gateway to the market as private solutions are sold to states as innovation.

Trump’s other concept is that the door to engaging consumers in healthcare is price transparency. His view is that price transparency will spawn consumer engagement.

Centers for Medicare and Medicaid Services Administrator Seema Verma, who was appointed by Trump in 2016 based largely on the recommendation of Pence, is instituting a rule, starting January 1, 2021, requiring hospitals to have price transparency for 300 shoppable services. Hospitals are being required to make their contract terms with payer accessible.

This is separate from CMS’s interoperability rule aimed at payers that also goes into effect on January 1.

Trump believes healthcare is a personal responsibility, not a public obligation. To Trump, healthcare is a marketplace where there are winners and losers, according to Keckley.

Biden has a more developed policy platform on making healthcare a universal right, starting with strengthening the Affordable Care Act that was passed while Biden was vice president during President Barack Obama’s terms.

Biden wants to increase the eligibility for tax subsidies in the ACA up to 400% of the federal poverty level, which would expand access to subsidized health insurance.

He also wants to reduce the affordability threshold for employer insurance. Currently, if employees pay more than 9.7% of their adjusted income for their workplace coverage, they can seek a plan in the ACA marketplace. Biden would lower that eligibility for ACA coverage to 8.5%, opening the door for many more consumers to be insured through the ACA, at a lower cost.

Biden would also lower the age of eligibility for Medicare from 65 to 60.

For companies such as manufacturing and transportation, in which individuals can retire after 30 years of service, this lets them into the Medicare system earlier to fill that gap between retirement and Medicare eligibility.

Biden’s public option would create insurance plans that would compete with private plans. 

The other factor to watch on the Biden side, Keckley said, is his clear focus on equity and diversity in healthcare. 

AFFORDABLE CARE ACT

Biden wants to strengthen Obamacare while Trump is actively pursuing a repeal of the law through the Supreme Court. 

President Trump’s debate prep and the White House Rose Garden event announcing the nomination of Judge Amy Coney Barrett to replace the late Supreme Court Justice Ruth Bader Ginsburg, border on the definition of super spreader events.

The Justices, perhaps with the addition of Trump’s pick, Amy Coney Barrett, if there are enough Republican senators well enough and in attendance to vote for confirmation, are scheduled to hear oral arguments in the case brought by 18 GOP-led states on November 10, the week after the election.

Senators must be present to vote, and Republicans, who have a majority of 53 to 47 seats, need a four-vote majority. Two Republican senators – Susan Collins of Maine and Lisa Murkowski of Alaska – have said they wouldn’t vote on a nominee prior to the election. Vice President Mike Pence could cast the deciding vote in a tie.

Three Republican senators have tested positive for the coronavirus. Sens. Mike Lee of Utah and Thom Tillis of North Carolina, who sit on the Judiciary Committee, tested positive for COVID-19 days after attending the White House Rose Garden event on September 26. Republican Sen. Ron Johnson of Wisconsin is now the third to test positive, though he did not attend that event.

There was a lack of social distancing and mask wearing at both the Rose Garden nomination and at a meeting between Trump and staff for debate prep. Twelve people in Trump’s inner circle, including his wife Melania, former New Jersey governor Chris Christie and White House Press Secretary Kayleigh McEnany, have tested positive since attending.

Senate Majority Leader Mitch McConnell wrote in an email to GOP senators obtained by CNN that he needs all Republican senators back in Washington by October 19.

COVID-19

Trump announced in a tweet Monday that he would be leaving Walter Reed later in the afternoon, saying he felt “really good!” and adding, “Don’t be afraid of Covid. Don’t let it dominate your life. We have developed, under the Trump Administration, some really great drugs & knowledge. I feel better than I did 20 years ago!”

Trump has been criticized for leaving the hospital on Monday to take a drive-by ride to wave to supporters. Attending physician Dr. James Phillips called the action “insanity” and “political theater” that put the lives of Secret Service agents in the car with him at risk.

Trump has downplayed the virus in an effort to reopen the country and the economy, and has put the blame on China, where the coronavirus originated.

Trump told Biden during the debate, “We got the gowns; we got the masks; we made the ventilators. You wouldn’t have made ventilators – and now we’re weeks away from a vaccine.” 

Biden puts the blame squarely on Trump for delaying action to stop the spread.

Biden said during the debate: “Look, 200,000 dead. You said over seven million infected in the United States. We in fact have 5% or 4% of the world’s population – 20% of the deaths. Forty thousand people a day are contracting COVID. In addition to that, about between 750 and 1,000 people, they’re dying. When [Trump] was presented with that number he said ‘It is what it is’ – what it is what it is – because you are who you are. That’s why it is. The president has no plan. He hasn’t laid out anything.”

Biden said that back in July he laid out a plan for providing protective gear and providing money the House passed to get people the help they need to keep their businesses open and open schools. 

Under Trump’s Administration, Congress passed $175 billion in provider relief funds for hospitals, small businesses, individuals and others – $100 billion from the CARES Act and $75 billion from the Paycheck Protection Program and Healthcare Enhancement Act.

MEDICAID EXPANSION

CMS Administrator Seema Verma was healthcare advisor to Pence while he was governor of Indiana. Her consulting firm, SVC, Inc., worked closely with Pence to design Indiana’s Medicaid expansion under the Affordable Care Act. They developed a unique Medicaid expansion program called Health Indiana Plan 2.0, which mandated low income adults above the poverty level pay monthly premiums for their healthcare. 

Members who did not pay faced being disenrolled for six months. 

As administrator, Verma has initiated similar work requirements for Medicaid coverage nationwide.

While as governor Pence implemented Medicaid expansion, as vice president he has supported torpedoing the ACA, and has pushed the Graham-Cassidy plan for healthcare reform that would have replaced the ACA.

DRUG PRICES

Neither Trump nor Biden has taken on the pharmaceutical industry in a meaningful way, though both have voiced a strong belief that drug manufacturers are egregious to the system, according to Keckley.

“Both camps are saying, we’re really going to take them on,” he said. 

During the debate, Trump said he was cutting drug prices by allowing American consumers to buy drugs from Canada and other countries under a favored nation status. 

“Drug prices will be coming down, 80 or 90 percent,” Trump said during the debate, telling Biden he hadn’t done anything similar during his 47 years in government.

If Trump gets a second term, there will likely be more industry folks in his circle, following up on his first term of stacking his cabinet with business people.

Biden would be more likely to lean toward a blend of public health officials and industry executives. There would be more of a spotlight on wealth creation in healthcare and executive pay.

In the $1.1 trillion world of prescription drugs, the United States makes up 40% of the market. 

“We’re the hub of the prescription drug industry,” Keckley said. 

CommonSpirit Health posts $550M operating revenue loss in fiscal year due to COVID-19

A financial chart

Hospital system CommonSpirit Health reported operating revenue losses of $550 million during its fiscal year that ended in June, as the COVID-19 pandemic continues to roil patient volumes.

The 137-hospital system reported its financial earnings Friday for the 2020 fiscal year that ended June 30. CommonSpirit’s expenses also surged during the pandemic as more resources were needed to screen visitors and staff.

“Although it varies significantly by division, beginning the middle of March, the COVID-19 pandemic caused up to a 40% slowdown in volumes,” CommonSpirit’s financial report said. “As communities heeded guidelines to avoid hospitals for non-emergent issues, appointment volume, especially for specialty practices, fell and emergency department volume declined.”

CommonSpirit’s patient volumes did rebound after shelter-in-place orders started to be lifted in April and May, but the volumes are still below pre-pandemic levels.

At the end of the system’s fiscal year on June 30, the volumes on adjusted admissions were down 6.2% compared with the 2019 fiscal year.

Adjusted patient days for the fiscal year were also lower than the same period in 2019 by 5.7%.

At the same time, net patient and premium revenues declined by $239 million, or 0.9% over the same period in 2019.

“The decrease is primarily due to the impact of the COVID-19 pandemic and increased charity care, partially offset by a stable payor mix,” the earnings said.

Overall, CommonSpirit recorded an operating loss of $550 million for the 2020 fiscal year, which was an improvement on the $617 million in losses from 2019.

But those 2020 losses ballooned up to $1.4 billion when not taking into account money the system received from a $175 billion provider relief fund Congress set up as part of the CARES Act to help prop up hospitals and other providers.

The system also reported a $1.3 billion decline in earnings before interest, tax, depreciation and amortization and nonoperating income from March through June.

About 62% of the lost EBITDA has been recouped through the CARES Act funding, and another $500 million remains to be regained, CommonSpirit said.

Overall, CommonSpirit has recorded $826 million in money from the provider relief fund. It also got another $2.6 billion from the Medicare Accelerated and Advance Payment Program, which the system will have to repay.

The system anticipates it will defer $410 million in employer payroll taxes to December 2022, a flexibility also afforded under the CARES Act.

“While the aid received from the programs above provides much needed assistance during this crisis, CommonSpirit is unable to assess the extent to which the amounts and benefits received, or to be received, will offset the long-term changes in volumes, payor mix or service mix,” the report said.

The Department of Health and Human Services has more than $50 billion to still give out to hospitals, but some hospital groups say that more money is needed to combat the financial crisis caused by the pandemic. Talks on a new coronavirus relief deal have stalled in Congress.

While some larger for-profit systems such as HCA and Tenet have posted profits thanks to the provider relief funding, other not-for-profit systems such as Trinity Health and some smaller systems have reported struggles with overcoming the new financial crisis.

Another 870,000 Americans filed new unemployment claims last week

https://finance.yahoo.com/news/jobless-claims-coronavirus-unemployment-week-ended-september-19-2020-184747657.html

Another 870,000 Americans filed for first-time unemployment benefits last week, unexpectedly rising slightly from the prior week to reaffirm a slowdown in the U.S. economic recovery.

The U.S. Department of Labor (DOL) released its weekly jobless claims report at 8:30 a.m. ET Thursday. Here were the main metrics from the report, compared to Bloomberg estimates:

  • Initial jobless claims, week ended Sept. 19: 870,000 vs. 840,000 expected, and 866,000 during the prior week
  • Continuing claims, week ended Sept. 12: 12.580 million vs. 12.275 million expected, and 12.747 million during the prior week

At 870,000, Thursday’s figure represented the fourth consecutive week that new jobless claims came in below the psychologically important 1 million level, but was still high on a historical basis. Nevertheless, the labor market has made strides in recovering from the pandemic-era spike high of nearly 7 million weekly new claims seen in late March.

“While jobless claims under a million for four straight weeks could be considered a positive, we’re staring down a pretty stagnant labor market,” Mike Loewengart, managing director of investment strategy for E-Trade Financial Corporation, said in an email Thursday. “This has been a slow roll to recovery and with no signs of additional stimulus from Washington, jobless Americans will likely continue to exist in limbo. Further, a shaky labor market translates into a skittish consumer, and in the face of a pandemic that seemingly won’t go away without a vaccine, the outlook for the economy certainly comes into question.”

On an unadjusted basis, initial jobless claims rose by a greater margin, or about 28,500, from the previous week to about 824,500. The seasonally adjusted level of new claims rose by 4,000 week on week.

By state, unadjusted claims in California – where joblessness due to the pandemic has compounded with labor market stress due to wildfires – were again the highest in the country at more than 230,000, for an increase of about 4,400 week-over-week. Georgia, New York, New Jersey and Massachusetts also reported significant increases in new claims relative to the rest of the country. Most states reported at least increases in new claims last week.

Continuing claims have also trended lower after a peak of nearly 25 million in May, and fell for a second straight week in this week’s report. But these claims, which capture the total number of individuals still receiving unemployment insurance, have not broken below the 12 million mark since before the pandemic took hold of the labor market in mid-March.

Consistently high numbers of individuals have been filing for, and receiving, jobless benefits from regular state programs, and those newly created during the pandemic. The number of individuals claiming benefits in all programs for the week ended September 5 – the latest reported week – fell for the first time following three straight weeks of increases to 26.04 million, from the nearly 29.8 million reported during the prior week.

Of that total, more than 11.5 million comprised individuals receiving Pandemic Unemployment Assistance, which is aimed at self-employed and gig workers who don’t qualify for regular unemployment compensation but have still been impacted by the pandemic.

One of the major downside risks to further improvement in the labor market has been concern that Congress may not soon pass another round of fiscal stimulus aimed at keeping individuals on payrolls during the pandemic. Economists have already said that the end of the last round of augmented federal unemployment benefits in late July has weighed on improvements in joblessness.

“The current picture suggests that growth has slowed sharply in the past three months, and that the labor market is stalling again in the face of rising infections and the sudden ending of federal government support to unemployed people,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, said in a note Wednesday.

The need for more fiscal stimulus to encourage the economy’s ongoing recovery has become a key talking point of policymakers including Federal Reserve Chair Jerome Powell and his colleagues at the central bank. In congressional testimony Tuesday and Wednesday, the Fed leader said further fiscal stimulus is “unequaled” by any other form of support that could be unleashed, with the central bank’s lending facilities having gone largely untouched by Main Street.

“The concept of the [congressionally authorized] Paycheck Protection Program was helpful because for many of those kinds of businesses – those businesses that don’t have cash reserves – the ability to get a forgivable loan if they stay open, if they keep people employed, was sound, and did give them the prospect of staying in business,” Joseph Minarik, The Conference Board chief policy economist and former Office of Management and Budget chief economist, told Yahoo Finance. “The notion that you have businesses that have been weak over the last few months and now have simply had to shut their doors, that’s a real problem, and it is not necessity going to be solved with a loan.”

 

 

 

 

Moody’s: Hospital financial outlook worse as COVID-19 relief funds start to dwindle

https://www.fiercehealthcare.com/hospitals/moody-s-hospital-financial-outlook-worse-as-covid-19-relief-funds-start-to-dwindle?mkt_tok=eyJpIjoiWTJZek56Z3lNV1E0TW1NMyIsInQiOiJKdUtkZE5DVGphdkNFanpjMHlSMzR4dEE4M29tZ24zek5lM3k3amtUYSt3VTBoMmtMUnpIblRuS2lYUWozZk11UE5cL25sQ1RzbFpzdExcL3JvalBod3Z6U3BZK3FBNjZ1Rk1LQ2pvT3A5Witkc0FmVkJocnVRM0dPbFJHZTlnRGJUIn0%3D&mrkid=959610

For-profit hospitals are expected to see a financial decline over the next 12 to 18 months as federal relief funds that shored up revenue losses due to COVID-19 start to wane, a recent analysis from Moody’s said.

The analysis, released Monday, finds that cost management is going to be challenging for hospital systems as more surgical procedures are expected to migrate away from the hospital and people lose higher-paying commercial plans and go to lower-paying government programs such as Medicaid.

“The number of surgical procedures done outside of the hospital setting will continue to increase, which will weaken hospital earnings, particularly for companies that lack sizeable outpatient service lines (including ambulatory surgery centers),” the analysis said.

A $175 billion provider relief fund passed by Congress as part of the CARES Act helped keep hospital systems afloat in March and April as volumes plummeted due to the cancellation of elective procedures and reticence among patients to go to the hospitals.

Some for-profit systems such as HCA and Tenet pointed to relief funding to help generate profits in the second quarter of the year. The benefits are likely to dwindle as Congress has stalled over talks on replenishing the fund.

“Hospitals will continue to recognize grant aid as earnings in Q3 2020, but this tailwind will significantly moderate after that,” Moody’s said.

Cost cutting challenges

Compounding problems for hospitals is how to handle major costs.

Some hospital systems cut some costs such as staff thanks to furloughs and other measures.

“Some hospitals have said that for every lost dollar of revenue, they were able to cut about 50 cents in costs,” the analysis said. “However, we believe that these levels of cost cuts are not sustainable.”

Hospitals can’t cut costs indefinitely, but the costs for handling the pandemic (more money for personal protective equipment and safety measures) are going to continue for some time, Moody’s added.

“As a result, hospitals will operate less efficiently in the wake of the pandemic, although their early experiences in treating COVID-19 patients will enable them to provide care more efficiently than in the early days of the pandemic,” the analysis found. “This will help hospitals free up bed capacity more rapidly and avoid the need for widespread shutdowns of elective surgeries.”

But will that capacity be put to use?

The number of surgical procedures done outside of the hospital is likely to increase and will further weaken earnings, Moody’s said.

“Outpatient procedures typically result in lower costs for both consumers and payers and will likely be preferred by more patients who are reluctant to check-in to a hospital due to COVID-19,” the analysis said.

The payer mix will also shift, and not in hospitals’ favor. Mounting job losses due to the pandemic will force more patients with commercial plans toward programs such as Medicaid.

“This will hinder hospitals’ earnings growth over the next 12-18 months,” Moody’s said. “Employer-provided health insurance pays significantly higher reimbursement rates than government-based programs.”

Bright spots

There are some bright spots for hospitals, including that not all of the $175 billion has been dispersed yet. The CARES Act continues to provide hospitals with a 20% add-on payment for treating Medicare patients that have COVID-19, and it suspends a 2% payment cut for Medicare payments that was installed as part of sequestration.

The Centers for Medicare & Medicaid Services also proposed increasing outpatient payment rates for the 2021 fiscal year by 2.6% and in-patient rates by 2.9%. The fiscal year is set to start next month.

Patient volumes could also return to normal in 2021. Moody’s expects that patient volumes will return to about 90% of pre-pandemic levels on average in the fourth quarter of the year.

“The remaining 10% is likely to come back more slowly in 2021, but faster if a vaccine becomes widely available,” the analysis found.

 

 

 

 

U.S. Jobless Claims Fall, but Layoffs Continue: Live Updates

U.S. jobless claims fall in mid-September, but the economy still suffering  lots of layoffs - MarketWatch

New claims for state unemployment insurance fell last week, but layoffs continue to come at an extraordinarily high level by historical standards.

Initial claims for state benefits totaled 790,000 before adjusting for seasonal factors, the Labor Department reported Thursday. The weekly tally, down from 866,000 the previous week, is roughly four times what it was before the coronavirus pandemic shut down many businesses in March.

On a seasonally adjusted basis, the total was 860,000, down from 893,000 the previous week.

“It’s not a pretty picture,” said Beth Ann Bovino, chief U.S. economist at S&P Global. “We’ve got a long way to go, and there’s still a risk of a double-dip recession.”

The situation has been compounded by the failure of Congress to agree on new federal aid to the jobless.

A $600 weekly supplement established in March that had kept many families afloat expired at the end of July. The makeshift replacement mandated by President Trump last month has encountered processing delays in some states and has funds for only a few weeks.

“The labor market continues to heal from the viral recession, but unemployment remains extremely elevated and will remain a problem for at least a couple of years,” said Gus Faucher, chief economist at PNC Financial Services. “Initial claims have been roughly flat since early August, suggesting that the pace of improvement in layoffs is slowing.”

New claims for Pandemic Unemployment Assistance, an emergency federal program for freelance workers, independent contractors and others not eligible for regular unemployment benefits, totaled 659,000, the Labor Department reported.

Federal data suggests that the program now has more beneficiaries than regular unemployment insurance. But there is evidence that both overcounting and fraud may have contributed to a jump in claims.

 

 

 

 

More cities and states are opening bars and restaurants despite mounting evidence of potential danger

https://www.washingtonpost.com/health/2020/09/14/covid-spread-restaurants-bars/?arc404=true&itid=lk_inline_manual_28&itid=lk_inline_manual_10&itid=lk_inline_manual_9

More cities and states are opening bars and restaurants despite mounting  evidence of potential danger — TodayHeadline

In New York City, diners will be able to have a meal inside a restaurant at the end of the month, something that hasn’t happened there since the coronavirus pandemic began. In some parts of Florida, bars reopened Monday for the first time since late June.

One decision appears to be riskier than the other, according to an analysis of cellphone and coronavirus case data by The Washington Post.

States that have reopened bars experienced a doubling in the rate of coronavirus cases three weeks after the opening of doors, on average. The Post analysis — using data provided by SafeGraph, a company that aggregates cellphone location information — found a statistically significant national relationship between foot traffic to bars one week after they reopened and an increase in cases three weeks later.

The analysis of the cellphone data suggests there is not as strong a relationship between the reopening of restaurants and a rise in cases, nor with bar foot traffic and cases over time, except for a handful of states.

But like with so much in the pandemic, easy answers can prove elusive.

study by the Centers for Disease Control and Prevention of nearly 300 adults who tested positive for the coronavirus found that they were more than twice as likely to have dined at a restaurant in the two weeks before getting sick than people who were uninfected. Those who tested positive and did not have close contact with anyone sick were also more likely to report going to a bar or coffee shop. The same effect was not seen in visits to salons, gyms and houses of worship, or in the use of public transportation.

“You’re sitting there for a long time, everyone’s talking,” said Linsey Marr, an environmental engineer at Virginia Tech. “And that’s just a recipe for spread.”

Few states make their contact-tracing data available, but in two that do — Colorado and Louisiana — bars and restaurants are responsible for about 20 percent of cases traced to a known source. San Diego traced nearly one-third of community outbreaks to restaurants and bars, more than any other setting.

But Louisiana’s experience suggests bar patrons contribute more to the spread of the virus than restaurant diners. There have been 41 outbreaks tied to restaurants and the same number of outbreaks associated with bars, but bar outbreaks appeared to result in more infections, with 480 cases traced to those establishments compared with 180 from restaurants.

Marr said indoor dining can be reasonably safe in a restaurant operating at 25 percent capacity and with a ventilation system that fully recirculates air every 10 minutes. New York City’s policy will allow for only 25 percent capacity at first, with a scheduled increase to 50 percent in November if transmission rates remain low.

Still, Marr said, she “will not eat inside a restaurant until the pandemic is over.” As one of the first scientists to begin emphasizing that the virus was spread primarily by air, she has been concerned about indoor drinking and dining since March.

“People go to restaurants to talk,” she said, “and we know that it’s talking that produces a lot — 10 to 100 times more — aerosols than just sitting.”

Other countries facing outbreaks imposed stricter and longer shutdowns on bars and restaurants. Ireland has yet to open its pubs. Countries that did reopen bars and restaurants have, like American states, scaled back in the face of fresh outbreaks.

Researchers at the Massachusetts Institute of Technology say that because U.S. policies vary by state and county, waves of closures and reopenings may have perversely led to more viral spread, as people traveled to enjoy freedoms not allowed closer to home.

The National Restaurant Association argues that restaurants are safe if they follow proper mitigation guidelines and that the industry has been unfairly maligned by the actions of an irresponsible few.

“Bars become particularly risky,” said Larry Lynch, who handles food science for the restaurant trade group. “Anybody who had been in bars knows that conversations get louder, people get closer.”

But, he said, “we haven’t seen … any kind of systemic outbreaks from people going into a restaurant that’s practicing what we ask them to practice.”

Lynch questioned the methodology of the CDC study, noting it covered only 295 people and did not identify the sources of transmission.

The American Nightlife Association, which represents the bar and nightclub industry, did not respond to a request for comment.

Kristen Ehresmann, director of the Infectious Disease Epidemiology, Prevention and Control Division at the Minnesota Department of Health, agreed that when restaurants and bars abide by guidelines designed to reduce transmission, few cases of the coronavirus have been traced to those establishments.

But there are more than a few bad actors, she said: 1,592 cases of covid-19, the disease caused by the coronavirus, have been tied to 66 bars and restaurants in Minnesota. And in 58 other establishments, cases were reported among only staff members, resulting in 240 illnesses. One bar in St. Cloud, Minn., the Pickled Loon, was the only place visited by 73 people who got sick and was one stop among several for 44 other people.

“The bottom line is, we’re seeing a big chunk of our cases associated with these venues, and those cases go on to get other cases in other settings,” Ehresmann said. “We can’t ignore the impact.”

Iowa’s first big spike in coronavirus cases originated in the meatpacking industry. Then, says University of Iowa epidemiologist Jorge Salinas, came bars in college towns such as Iowa City, where he is based.

“It was very clear,” Salinas said. “We reviewed records for patients, and they all shared that common exposure of having been to a bar in the previous five days or so. Usually, the same bars that tend to be very crowded and very loud, rather than a place you just sit down to go and have a beer.”

He said those bars began closing not because of government intervention, but because so many staff members fell ill. By that point, the young people who got infected at bars had begun spreading the virus to an older population through family and work.

After about two months, the outbreak in Iowa City started to burn out. But then college students started returning to campus.

“It’s just a different group of young people but similar exposures — going to bars, hanging out, going to large parties,” he said.

He said an order from Gov. Kim Reynolds (R) closing bars in Iowa City and five other hard-hit counties was welcome but overdue. In the past two weeks, more than 1,000 young people in the region have become infected.

“Unfortunately, it’s late in the game,” Salinas said. “It would have been better if it had been done to prevent this rather than as a reaction to this.”

Politicians who favor an aggressive approach to containing the coronavirus have been hesitant to shut down bars and restaurants. Expanded federal unemployment benefits lapsed more than a month ago. Loans to small businesses are forgiven only if they can keep workers on the payroll, which is usually impossible while running at reduced capacity.

According to the Bureau of Labor Statistics, 2.5 million jobs in bars and restaurants have been lost since February. Although that’s an improvement from the spring, many restaurant owners say they are barely hanging on.

“Winter is coming, and I’m staring down the barrel of the gun of what’s going to happen,” said Ivy Mix, owner of a restaurant called Leyenda in New York and author of the book “Spirits of Latin America.” Even when indoor dining reopens, Mix said she is not sure she and her staff would be comfortable serving enough people inside her Brooklyn restaurant to make a profit.

“This is almost like being thrown a deflated life-jacket — the action and the symbolism is there, but the actual aid is not,” she said.

That’s why she says the only solution is federal legislation introduced by Rep. Earl Blumenauer (D-Ore.) that would issue $120 billion in grants to independent bars and restaurants. A Senate version would cover some chains as well.

“Eleven million people work for these independent restaurants,” Blumenauer said. “If we don’t do something, the evidence suggests that 85 percent of them are not going to survive this year.”

His office estimates that the legislation would more than pay for itself, generating $186 billion in tax revenue and unemployment savings. He said President Trump was receptive in a meeting with supporters earlier this year, but that in recent weeks the administration “has basically shut down meaningful negotiations.”

Arizona reopened indoor restaurants and some bars at the end of August, after a hasty spring reopening and more than 5,000 deaths.

“We really kind of reaped the whirlwind,” said David Engelthaler, a former state epidemiologist now at the Translational Genomics Research Institute. “A lot of that was driven by people going into bars and nightclubs, typically the 20- to 30-year-old set, interacting, socializing like they did prepandemic. And that just supported a kind of wildfire of cases.”

He said he thinks it is probably feasible to reopen restaurants at reduced capacity, but bars are a different story.

“One thing that all bars have in common is that they create a lowering of inhibition, and I think more than anything, this will cause the spread of covid,” he said. “We get more complacent, more comfortable, covid starts spreading.”

With temperatures still regularly topping 100 degrees in Arizona, the appeal of outdoor food and drink is limited. After a rapid May reopening led to a spike in cases and deaths, the state has just begun trying a more cautious approach.

Under Arizona’s new, more deliberate reopening, businesses must apply to reopen and bars must serve food to qualify. But Saskia Popescu, an epidemiologist based in Phoenix, said it is unclear whether those requirements are sufficiently stringent.

“If you put out two items does that count?” she asked. “I just worry that we’re kind of all doing this at once.” She noted that more than 500 new cases a day continue to be reported in Arizona, about the same as during the first reopening: “We’ll see if we learn from our lessons.”