Health Care in the 2020 Presidential Election: What’s at Stake

https://www.commonwealthfund.org/blog/2020/health-care-2020-presidential-election-whats-stake

Health Care in the 2020 Presidential Election: Summary

As the presidential election draws near, we reflect on the meaningful differences in health policy priorities and platforms between the two candidates, which we’ve described more fully in our recent blog series.

While similarities exist in some areas — most notably prescription drug pricing and proposals to control health care costs — the most striking differences between the positions taken by President Donald Trump and those of former Vice President Joe Biden are on safeguarding access to affordable health care coverage, advancing health equity for those who have been historically disadvantaged by the current system, and managing the novel coronavirus pandemic.

The importance of maintaining or expanding access to affordable health care in the midst of a pandemic cannot be understated. Going into the crisis, 30 million Americans lacked health coverage, with many more potentially at risk as a result of the current economic downturn. And even for many with coverage, costs are a barrier to receiving care. Moreover, despite efforts by Congress and the Trump administration to ease the financial burden of COVID-19 testing and treatment, many people remain concerned about costs; examples of charges for COVID-related medical expenses are not uncommon.

In this context, President Trump’s efforts to repeal the Affordable Care Act (ACA) is the most important signal of his position on health care. The administration’s legal challenge of the law will be considered by the Supreme Court this fall. With no Trump proposal for a replacement to the ACA, if the Court strikes the law in its entirety or in part, many voters cannot be certain that their health coverage will be secure. By undermining the ACA — the vast law that protects Americans with preexisting health conditions and makes health coverage more affordable through a system of premium subsidies and cost-sharing assistance — the president has put coverage for millions at risk.

Trump issued an executive order to preserve preexisting condition protections. If the ACA remains intact, the order is redundant. But if the ACA is repealed by the Court, the order is meaningless because it lacks the legal underpinning and legislative framework to take effect.

In contrast, Vice President Biden has proposed expanding coverage through the ACA by adding a public option, enhancing subsidies to make health care more affordable, filling the gap for low-income families living in states that did not expand Medicaid, and giving people with employer health plans the option to enroll in marketplace coverage and take advantage of premium subsidies. For sure, if Biden is elected, many policy details must be ironed out; passing legislation in a deeply divided Congress is never easy. Despite these challenges, Biden proposes expanding health coverage rather than revoking it.

Just as COVID-19 has exposed gaps in health coverage and affordability, it also has highlighted the poor health outcomes stemming from racial and ethnic inequities in the U.S. health system. Communities of color — Black, Hispanic, and American Indian and Alaska Native people — have higher rates of COVID cases, hospitalizations, and deaths compared to white people. These disparities are a result of myriad factors, many of which are deeply rooted in structural racism. The candidates’ plans to address health disparities and advance health equity set them apart.

The ACA has played a critical role in reducing disparities in access to health care and narrowed the uninsured rate among Black and Hispanic people compared to white people. Medicaid expansion has been key to improving racial equity. Repealing the ACA, as President Trump has sought to do, would reverse these gains. Even beyond repealing the ACA, this administration has pursued policies intended to limit Medicaid eligibility — for example, by permitting states to impose work requirements and other restrictions that would lead to fewer people covered. These measures and others are already having an impact; coverage gains achieved through the ACA have eroded since 2016. Health care for legal immigrants also has declined as a result of policies like the recently finalized “public charge” rule, which seems also to have caused an increase in uninsurance among children. The administration has further revoked ACA antidiscrimination and civil rights protections for LGBTQ people.

In addition to restoring and expanding coverage under the ACA, Vice President Biden has pledged to address health disparities and reinstate antidiscrimination protections. He has a proposal to advance racial equity not just in health care but across the economy. If successful, his plan could address underlying factors contributing to higher rates of COVID-19 cases and deaths among people of color, as well as their higher rates of heart disease, diabetes, and other health conditions tied to social determinants of health.

Finally, the candidates differ deeply in their approaches to the coronavirus pandemic. President Trump has failed to orchestrate a national strategy for combating coronavirus and has routinely undermined accepted public health advice with respect to mask-wearing and social distancing. He has delegated to the states responsibility for controlling the pandemic when it is clear that the virus travels freely across the country, regardless of state borders. Lax states can negate the efforts of those states sacrificing to bring the pandemic under control. Vice President Biden has strongly signaled, though his personal conduct and rhetoric, that he intends more aggressive federal leadership in fighting the virus.

In a recent Commonwealth Fund survey of likely voters, control of the pandemic and covering preexisting conditions were very important factors in choosing a president. In seven battleground states, protections for preexisting conditions outweighed COVID-19 and health costs as the leading health care issue voters are considering. In all 10 battleground states included in the survey, Vice President Biden was viewed as the more likely candidate to address these critical health care issues.

Perhaps since the Civil War, the United States has never faced starker choices in a presidential election. In health and other areas, there are profound differences in the positions of President Trump and former Vice President Biden. Voting this November is literally a matter of life and death for the American people.

Health Care in the 2020 Presidential Election: Health Insurance Coverage and Affordability

https://www.commonwealthfund.org/blog/2020/health-care-2020-presidential-election-health-insurance-coverage-and-affordability

Health Care in the 2020 Presidential Election: Coverage

The Issue

  • The number of uninsured people has increased since 2016, rising from 29 million, following the reforms of the Affordable Care Act (ACA), to 35.7 million by the end of 2019. The economic recession has left an estimated 3 million more people uninsured this year.
  • Racial inequities in coverage narrowed after the ACA, but uninsured rates among people of color exceed those of white people.
  • Many insured people pay premiums that consume an increasingly large share of their income.
  • An estimated 40 million people with insurance are effectively underinsured because of deductibles and cost-sharing.
  • An estimated 133 million people under age 65 have preexisting health conditions; COVID-19 has already increased that number by an estimated 3.4 million nonelderly adults (20–59) as of October 7.

The Candidates’ Approaches

PRESIDENT DONALD TRUMP

Overall approach: Repeal the ACA and replace it with market-driven coverage options aimed at lowering premiums and increasing choice of plans tailored to individual preferences; give states more flexibility in designing coverage options; require more accountability for people with low incomes enrolled in public programs; protect preexisting conditions.

Medicaid: Repeal the ACA Medicaid expansion for adults; provide block grants to states to design their own programs; increase accountability through work requirements.

Individual market and marketplaces: Has promoted weaker regulations on plans that don’t comply with the ACA’s preexisting condition protections and other requirements; elimination of advertising and enrollment assistance during open enrollment; elimination of payments to insurers to offer lower-deductible plans.

Employer coverage: Has promoted weaker regulations on association health plans that don’t comply with the ACA and allowed employers to fund accounts for employees to buy health plans on their own, including products that don’t comply with the ACA.

VICE PRESIDENT JOE BIDEN

Overall approach: Protect insurance for people with preexisting conditions by supporting and building on the ACA; expand insurance coverage and reduce consumers’ health care costs by enhancing the ACA’s marketplace subsidies, covering people currently eligible for Medicaid in nonexpansion states, and giving more people in employer plans the option to enroll in marketplace plans with subsidies.

Medicaid: Expand enrollment by allowing eligible people in 12 states without Medicaid expansion to enroll in a public plan through the marketplaces with no premiums; make enrollment easier with autoenrollment.

Individual market and marketplaces: Expand enrollment through enhanced subsidies, greater advertising and enrollment assistance: no one pays more than 8.5 percent of income on marketplace coverage; change the benchmark plan from silver to gold to reduce deductibles and cost-sharing.

Employer coverage: Allows anyone with employer coverage to enroll in a public plan through the marketplaces and be eligible for subsidies.

Medicare: Would allow people ages 60 to 65 to enroll in a Medicare-like heath plan.

Implications of the Candidates’ Approaches

I DON’T HAVE HEALTH INSURANCE. WILL THE APPROACHES PROVIDE ME WITH NEW OPTIONS?

Trump: The number of people without health insurance has increased under the president’s watch in part because of policies that have eliminated the promotion and advertising of marketplace open-enrollment periods, enrollment restrictions in Medicaid, and immigration policies that have had a chilling effect on enrollment of legal immigrants and their children. Trump supports a lawsuit now before the Supreme Court that argues for repeal of the ACA, which would eliminate coverage for as many as 20 million people. Says he will come up with a replacement but has yet to do so.

Biden: Has introduced proposals to build on the ACA by covering people in the 12 states that haven’t expanded Medicaid and enhance subsidies for marketplace plans. This would provide new options for people who are currently uninsured and increase coverage over time.

I HAVE A PREEXISTING HEALTH CONDITION. WILL THE APPROACH GUARANTEE THAT I CAN ALWAYS GET COVERED?

Trump: The ACA currently provides this protection. Trump supports the lawsuit before the Supreme Court that argues for repeal of the ACA and its preexisting conditions provision. Trump issued an executive order that said preexisting conditions are protected, but without the ACA or new legislation the order has no effect and is purely symbolic.

Biden: The vice president pledges to support and build on the ACA, retaining its preexisting condition protections.

MY PREMIUMS AND DEDUCTIBLES ARE BECOMING LESS AFFORDABLE; WILL THE CANDIDATES’ APPROACHES LOWER THEM?

Trump: The president eliminated payments to insurers to reimburse them for offering lower-deductible plans in the ACA marketplaces to people with lower incomes, as required by the law. This had the effect of increasing premiums for people not eligible for subsidies. He has promoted the sale of non-ACA-compliant health plans, like short-term plans. These plans have lower premiums for healthy people but screen for preexisting conditions and often provide little cost protection if someone becomes sick. He has loosened regulations for association health plans, although that was turned back under legal challenge. The repeal of the ACA would mean the loss of marketplace subsidies and preexisting-condition protections, making coverage unavailable or unaffordable for people with low and moderate incomes and those with health problems.

Biden: The vice president’s proposal to enhance marketplace subsidies will cap the amount of premiums people pay at 8.5 percent of income, including people in employer plans who would have the option to enroll in the marketplaces. By linking subsidies to gold plans, deductibles would also fall for those who choose those plans.

I AM WORRIED ABOUT RACIAL INEQUITY IN HEALTH CARE. WILL THE APPROACH MAKE HEALTH COVERAGE MORE EQUITABLE?

Trump: Uninsured rates among Hispanic people have risen under the president’s watch. Repealing the ACA would further eliminate coverage gains made by Hispanics, as well as Black people and Asian Americans, widening racial disparities in coverage and access.

Biden: The vice president’s proposals to expand coverage under the ACA will particularly benefit people of color. This is because people living in the 12 states that have not yet expanded Medicaid are disproportionately Black and Hispanic.

Coronavirus hospitalizations are on the rise

https://www.axios.com/coronavirus-hospitalizations-increasing-abc7e1f7-51b1-4b5c-a2e8-ab55685ac522.html

Share of hospital beds occupied
by COVID-19 hospitalizations

States shown from first date of reported data, from March 17 to Oct. 17, 2020

  • In the last two weeks hospitalizations are:
Coronavirus hospitalizations are on the rise - Axios

Coronavirus hospitalizations are increasing in 39 states, and are at or near their all-time peak in 16.

The big picture: No state is anywhere near the worst-case situation of not having enough capacity to handle its COVID-19 outbreak. But rising hospitalization rates are a sign that things are getting worse, at a dangerous time, and a reminder that this virus can do serious harm.

By the numbers: 39 states saw an increase over the past two weeks in the percentage of available hospital beds occupied by coronavirus patients.

  • Wisconsin is faring the worst, with 9.4% of the state’s beds occupied by COVID patients.
  • Sixteen states are at or near the highest hospitalization rates they’ve seen at any point in the pandemic.

Yes, but: The all-time peak of coronavirus hospitalizations happened in the spring, when 40% of New Jersey’s beds were occupied by COVID patients. Thankfully, even the the worst-performing states today are still a far cry from that.

Between the lines: These numbers, combined with the nationwide surge in new infections, confirm that the pandemic in the U.S. is getting worse — just as cold weather begins to set in in some parts of the country, which experts have long seen as a potentially dangerous inflection point.

  • They also suggest that most parts of the country won’t need to pause or scale back non-coronavirus treatments, as hospitals did in the spring when no one was quite sure how bad things could get.
  • In rural areas, however, even a modestly sized outbreak can strain local hospital capacity.

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.

8 hospitals laying off workers

https://www.beckershospitalreview.com/finance/8-hospitals-laying-off-workers-101520.html?utm_medium=email

Facing a financial squeeze, hospitals nationwide are cutting jobs

The financial challenges caused by the COVID-19 pandemic have forced hundreds of hospitals across the nation to furlough, lay off or reduce pay for workers, and others have had to scale back services or close. 

Lower patient volumes, canceled elective procedures and higher expenses tied to the pandemic have created a cash crunch for hospitals. U.S. hospitals are estimated to lose more than $323 billion this year, according to a report from the American Hospital Association. The total includes $120.5 billion in financial losses the AHA predicts hospitals will see from July to December. 

Hospitals are taking a number of steps to offset financial damage. Executives, clinicians and other staff are taking pay cuts, capital projects are being put on hold, and some employees are losing their jobs. More than 260 hospitals and health systems furloughed workers this year and dozens others have implemented layoffs. 

Below are eight hospitals and health systems that announced layoffs since Sept. 1, most of which were attributed to financial strain caused by the pandemic. 

1. Citing a need to offset financial losses, Minneapolis-based M Health Fairview said it plans to downsize its hospital and clinic operations. As a result of the changes, 900 employees, about 3 percent of its 34,000-person workforce, will be laid off.

2. Lake Charles (La.) Memorial Health System laid off 205 workers, or about 8 percent of its workforce, as a result of damage sustained from Hurricane Laura. The health system laid off employees at Moss Memorial Health Clinic and the Archer Institute, two facilities in Lake Charles that sustained damage from the hurricane.

3. Burlington, Mass.-based Wellforce laid off 232 employees as a result of operating losses linked to the COVID-19 pandemic. The health system, comprised of Tufts Medical Center, Lowell General Hospital and MelroseWakefield Healthcare, experienced a drastic drop in patient volume earlier this year due to the suspension of outpatient visits and elective surgeries. In the nine months ended June 30, the health system reported a $32.2 million operating loss. 

4. Baptist Health Floyd in New Albany, Ind., part of Louisville, Ky.-based Baptist Health, eliminated 36 positions. The hospital said the cuts, which primarily affected administrative and nonclinical roles, are due to restructuring that is “necessary to meet financial challenges compounded by COVID-19.”

5. Cincinnati-based UC Health laid off about 100 employees. The job cuts affected both clinical and non-clinical staff. A spokesperson for the health system said no physicians were laid off. 

6. Mercy Iowa City (Iowa) announced in September that it will lay off 29 employees to address financial strain tied to the COVID-19 pandemic. 

7. Springfield, Ill.-based Memorial Health System laid off 143 employees, or about 1.5 percent of the five-hospital system’s workforce. The health system cited financial pressures tied to the pandemic as the reason for the layoffs. 

8. Watertown, N.Y.-based Samaritan Health announced Sept. 8 that it laid off 51 employees and will make other cost-cutting moves to offset financial stress tied to the COVID-19 pandemic.

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.

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.”

 

 

 

 

Shapes of Recovery: When Will the Global Economy Bounce Back?

Shapes of Recovery: When Will the Global Economy Bounce Back?

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The Shape of Economic Recovery, According to CEOs

Is the glass half full, or half empty?

Whenever the economy is put through the ringer, levels of optimism and pessimism about its potential recovery can vary greatly. The current state mid-pandemic is no exception.

This graphic first details the various shapes that economic recovery can take, and what they mean. We then dive into which of the four scenarios are perceived the most likely to occur, based on predictions made by CEOs from around the world.

The ABCs of Economic Recovery

Economic recovery comes in four distinct shapes—L, U, W, and V. Here’s what each of these are characterized by, and how long they typically last.

  • L-shape
    This scenario exhibits a sharp decline in the economy, followed by a slow recovery period. It’s often punctuated by persistent unemployment, taking several years to recoup back to previous levels.
  • U-shape
    Also referred to as the “Nike Swoosh” recovery, in this scenario the economy stagnates for a few quarters and up to two years, before experiencing a relatively healthy rise back to its previous peak.
  • W-shape
    This scenario offers a tempting promise of recovery, dips back into a sharp decline, and then finally enters the full recovery period of up to two years. This is also known as a “double-dip recession“, similar to what was seen in the early 1980s.
  • V-shape
    In this best-case scenario, the sharp decline in the economy is quickly and immediately followed by a rapid recovery back to its previous peak in less than a year, bolstered especially by economic measures and strong consumer spending.

Another scenario not covered here is the Z-shape, defined by a boom after pent-up demand. However, it doesn’t quite make the cut for the present pandemic situation, as it’s considered even more optimistic than a V-shaped recovery.

Depending on who you ask, the sentiments about a post-pandemic recovery differ greatly. So which of these potential scenarios are we really dealing with?

How CEOs Think The Economy Could Recover

The think tank The Conference Board surveyed over 600 CEOs worldwide, to uncover how they feel about the likelihood of each recovery shape playing out in the near future.

The average CEO felt that economic recovery will follow a U-shaped trajectory (42%), eventually exhibiting a slow recovery coming out of Q3 of 2020—a moderately optimistic view.

However, geography seems to play a part in these CEO estimates of how rapidly things might revert back to “normal”. Over half of European CEOs (55%) project a U-shaped recovery, which is significantly higher than the global average. This could be because recent COVID-19 hotspots have mostly shifted to other areas outside of the continent, such as the U.S., India, and Brazil.

Here’s how responses vary by region:

Region L-shape U-shape W-shape V-shape
Global (N=606) 32% 42% 16% 11%
U.S. (N=103) 26% 42% 23% 9%
Europe (N=110) 29% 55% 12% 4%
China (N=122) 25% 43% 11% 21%
Japan (N=95) 49% 26% 23% 1%
Gulf Region (N=16) 57% 26% 17%

 

In the U.S. and Japan, 23% of CEOs expect a second contraction to occur, meaning that economic activity could undergo a W-shape recovery. Both countries have experienced quite the hit, but there are stark differences in their resultant unemployment rates—15% at its peak in the U.S., but a mere 2.6% in Japan.

In China, 21% of CEOs—or one in five—anticipate a quick, V-shaped recovery. This is the most optimistic outlook of any region, and with good reason. Although economic growth contracted by 6.8% in the first quarter, China has bounced back to a 3.2% growth rate in the second quarter.

Finally, Gulf Region CEOs feel the most pessimistic about potential economic recovery. In the face of an oil shock57% predict the economy will see an L-shaped recovery that could result in depression-style stagnation in years to come.

The Economic Recovery, According to Risk Analysts

At the end of the day, CEO opinions are all over the map on the potential shape of the economic recovery—and this variance likely stems from geography, cultural biases, and of course the status of their own individual countries and industries.

Despite this, portions of all cohorts saw some possibility of an extended and drawn-out recovery. Earlier in the year, risk analysts surveyed by the World Economic Forum had similar thoughts, projecting a prolonged recession as the top risk of the post-COVID fallout.

It remains to be seen whether this will ultimately indeed be the trajectory we’re in store for.