Understand Inflation In The Us
- Inflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.
- Your Questions, Answered: We asked readers to send questions about inflation. Top experts and economists weighed in.
- Whats to Blame: Did the stimulus cause prices to rise? Or did pandemic lockdowns and shortages lead to inflation? A debate is heating up in Washington.
- Supply Chains Role: A key factor in rising inflation is the continuing turmoil in the global supply chain. Heres how the crisis unfolded.
Fed and Treasury officials have used broader unemployment rates in the past, including a popular underemployment index after the 2009 recession, so this isnt totally new. But one thing thats been interesting to watch is that they often describe this 10 percent figure as the real unemployment rate, given the weirdness of the pandemic crisis and the ways it has messed with the normal data.
On Tuesday, Powell said that when the Fed thinks about full employment, it thinks about the employment-to-population rate, not just the unemployment rate. It underlined that officials are very aware that the plain-vanilla jobless rate doesnt capture the entire labor market picture.
Weve had a very volatile economy for the last 15 years, and inflation has just done what it was going to do it didnt go up, he said.
What Are Frictional And Structural Unemployment
- Frictional unemployemnet refers to and challenges in the labor market between workers seeking jobs and firms seeking workers. An example would be when a worker seeking a change in their career.
- Structural unemployment rate refers to number of workers who have been unemployed for a prolonged period of time. One example of this could be automation or the sending of jobs oversees. Some workers may not have the skills needed to find a new job, but have no chance of returning to work similar to that from which they lost.
No Biden Executive Order States Have Funding To Expand Unemployment Benefits
The Biden Administration has confirmed that they wont push to extend federally funded unemployment benefits past the September 6th expiration date via Executive Order or Congressional action. Instead they are encouraging states with high unemployment to use some of the existing $350 billion in ARPA stimulus allocated for State and Local Fiscal Recovery initiatives to fund enhanced unemployment benefits.
As discussed in this video, there is wide latitude for usage of these funds by state governors and departments, which includes funding emergency unemployment benefits. States who ended participation early in federal unemployment programs could also use these funds to extend/expand benefits if they choose to do so.
Some claimants may be eligible for State Extended Benefits , but after September 4th all claimants must have a regular UI claim to continue receiving benefits. See more in these state specific unemployment pages.
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Requesting A Review Of Your Pup Rate
If you feel that it may make a difference to your rate, you can request areview of your payment from the DSP.
To request a review of your rate, you should email You can also writeto PUP Rerate Requests, Department of Social Protection, Intreo Centre, CorkRoad, Waterford. You should include all supporting documentation with yourrequest.
What Type Of Changes Did Countries Make To Unemployment Support
This explainer lays out the policies adopted by seven advanced economies that have different social security systems in normal times. Most of the countries we look at here temporarily increased the provision for those not in work a group which increased in every country by increasing the size of payments or making more people eligible for unemployment benefits.
However, the approaches between the countries surveyed here differed. France and Germany made the smallest changes to the provision for the unemployed. Their existing system was already relatively generous for average and higher earners, and the only changes were to extend eligibility to these benefits. In France, the period of time that someone could claim enhanced benefits related to their salary was extended. In Germany, the requirements to access basic subsistence support were relaxed.
In the UK, eligibility to Universal Credit was not changed, but the generosity was increased by a relatively modest increase of £20 per week. This still left the UK system as one of the least generous, especially for those who previously had higher earnings.
Canada and Ireland both introduced entirely new benefits that applied both to those receiving ordinary unemployment benefits and more broadly, including to the self-employed and to care givers.
* All currency conversions based on market rates on 5 January 2022 and rounded to nearest £10.
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The Unemployment Figures In Detail
The total number of unemployed is 6.9 million, down 542,000 from October. The number of long-term unemployed dropped to 2.19 million. A smaller number, 1.9 million, lost jobs within the last five weeks. This number declined from October’s 2.1 million.
The real unemployment rate was 7.8% in November, 0.5 percentage points lower than in October. This alternate measure of unemployment, known as U-6, gives a broader definition of unemployment. It includes people who would like a job but haven’t looked for one in the past month. It also includes those who are underemployed and marginally attached.
The real unemployment rate includes 450,000 discouraged workers, down from 455,000 in October and down from 657,000 back in Nov. 2020. Discouraged workers are people who have given up looking for work but would take a job if offered. They are not counted in the unemployment rate because they haven’t looked for a job in the past four weeks.
The labor force participation rate in November was 61.8%, up 0.2 percentage points from October. The labor force doesn’t include those who haven’t looked for a job in the past month. Some would like a job, but others dropped out of the labor force for different reasons. They may have retired, gone back to school, or had a baby.
Back To Education Allowance And Pup
People getting PUP since July 2021 can qualify for the Back toEducation Allowance . You do not have to satisfy the usual timelimits for BTEA. For example, you may qualify for BTEA for a 3rd level courseeven if you have been getting PUP for less than 9 months. You must be enteringthe first year of your course.
You will have to transfer to a jobseeker’s payment before you can get BTEA, and your BTEA rate will bebased on your qualifying payment.
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How Is The New Stimulus Payment Determined
The package includes a new round of $1,400 payments for individuals with an adjusted gross income of up to $75,000, heads of household with income up to $112,500, and $150,000 for joint filers.
After that threshold, the payment amounts will be reduced until a ceiling is reached: $80,000 for single filers, $120,000 for heads of household, and $160,000 for married couples. No one with income above those ceilings will receive money in this round of stimulus payments.
Treasury Offset Program Collection
In October 2016, TWC began issuing letters to former unemployment benefit claimants who have debts that are subject to collection through the Treasury Offset Program . TOP is a federal program that collects past due debts owed to federal and state agencies by capturing Internal Revenue Service tax refunds to offset these debts. Claimants with an overpayment caused by incorrectly reported earnings, fraud and fraud penalties are subject to TOP. For more information, go to Overpayment of Unemployment Benefits.
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Republicans & Democrats Dont Agree On Unemployment Benefits
GettySenate Majority Leader Mitch McConnell.
According to CNBC, the $600 Democratic proposal for extra unemployment benefits is a key sticking point in the negotiations over the overall package.
The House earlier passed a $2.2 trillion stimulus package and it did include $600 weekly checks. Treasury Secretary Steven Mnuchin floated a counter-proposal that would provide $400, which is up from the $200 suggested in an early Republican proposal.
But the sides have not been able to agree.
Trump has made a second stimulus plan a focus on Twitter. On October 3, Trump wrote, OUR GREAT USA WANTS & NEEDS STIMULUS. WORK TOGETHER AND GET IT DONE. Thank you! The president cant get stimulus checks done on his own because the Constitution gives funding authority to Congress.
According to CNBC, Septembers job report was weak, driving need for another stimulus package.
Coronavirus: How Different Countries Supported The Unemployed
The coronavirus crisis led to big increases in unemployment in most developed countries as businesses were forced to shut and workplaces had to adjust to social distancing requirements. In response, some governments attempted to safeguard jobs by subsidising workers wages. Most countries also changed the support available for those who lost work during the pandemic .
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Are Some Against Extending The $600 Benefit
Yes. Yesterday 38 Republican members of Congress37 of them malesent a letter to President Trump, urging him to firmly oppose any extension of the $600 supplemental unemployment insurance. They point to a Congressional Budget Office report that found that 5 out of 6 recipients earn more with the benefit than they do when working, and that government benefits should not pay Americans more than if they went to work . . . the most effective path to economic recovery is to allow businesses to safely reopen their doors and rehire employees.
The letter echoes a chorus of Republican senators who are equating the $600 benefit with disincentivizing work.
How Did The Debt Grow So Large
Californias unemployment system has an important piggy bank: the unemployment insurance trust fund. Employers put money into it on a regular basis via taxes. Workers receive money from it when they get unemployment benefits.
The federal government loaned money to many states early in the pandemic to shore up their unemployment funds. But two years later, several states have paid off their federal loans, while Californias balance remains the highest of any state.
One key problem is that while California lawmakers have increased unemployment benefits over past decades, in part to keep up with inflation, the money flowing into the system from employers has not kept pace, said Audrey Guo, an economist at Santa Clara University who studies unemployment insurance.
On top of that, more Californians have been out of work throughout the pandemic compared to the national average. The national unemployment rate surged to 14.7% in April of 2020, and had come down to 8.4% by August of 2020, according to data from the Bureau of Labor Statistics.
But Californias jobless rate shot higher and didnt fall back as quickly. It reached 15.9% in April of 2020, and was still at 11.9% by August. In December 2021, California still had one of the highest unemployment rates in the nation.
In addition, many states used federal COVID relief money to pay off some or all of their unemployment insurance debt, but California hasnt done that.
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Who Can Get Covid
You can get the COVID-19 Pandemic Unemployment Payment if:
- You lost your job or are temporarily laid off due to the COVID-19 restrictions from 7 December 2021
- You are self-employed and your trading income has ceased or reduced due to the COVID-19 restrictions from 7 December 2021 and you are available to take up full-time employment
You must also:
- Be aged between 18 and 66
- Be living in Ireland
- Be genuinely seeking work
- Not be getting any income from an employer
Students and people living in Direct Provision who have lost employment dueto the currentCOVID-19 public health restrictions can also qualify.
If you have been getting PUP since 8 July 2021, you will continue to get itas long as you are eligible. However, it is being reduced to bring it in linewith current jobseekers payments .
You can find more information in the DSPguidelines about who can qualify for PUP.
You may lose your PUP payment if you:
- Refuse to return to work following lay off
- Refuse an offer of suitable employment
- Refuse or fail to engage with activation measures this can include training that will help you find a job
Men And Especially Black Men Jumped Back Into The Job Search In February
The share of adults participating in Americas labor force grew in February, as men in their prime working years increasingly found or searched for jobs and as many racial groups traced gains a welcome sign for economic policymakers and employers trying to gauge whether and when employees will return.
The overall participation rate nudged up to 62.3 percent from 62.2 percent in January, hitting its highest level since March 2020, and the details of the data showed especially strong gains among a few demographics.
Men between the ages of 25 and 54 participated at the highest rate since March 2020, 88.8 percent, down just slightly from their 89.2 percent participation rate before the onset of the pandemic, which caused abrupt job losses and sharply reduced labor force participation overall.
Among racial groups, participation climbed for white, Black and Hispanic people in February. Black and white people are participating in the job market at the same rate 62.2 percent which is a change from the decades before the pandemic, when Black people tended to be less attached to the job market than their white counterparts.
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Pup And Travel Abroad
If you are getting PUP, you must notify the Department of Social Protectionbefore going abroad. You can contact the Income Support Helpline on 0818 800024 and a note can be made on your PUP claim. If you are abroad for more than 2weeks, you will not continue to be eligible for PUP unless the extended absencehas been approved.
Biden Emergency Extension To Pandemic Unemployment Benefits
With the rapid spread of and potential economic slowdown from the virulent Delta COVID-19 strain there is now talk of the Biden administration repurposing some of existing ARPA stimulus bill funding to extend pandemic unemployment programs to the end of 2022.
This is similar to the six week LWA extension that President Trump passed by executive order last year when Congress could not initially agree on funding an extension to pandemic unemployment benefits.
If Congress cannot provide additional funding then this will be the most likely path for a short-term emergency extension of pandemic benefits and could be done relatively quickly along party lines, or simply by a Presidential Executive order. White House lawyers are likely already working on this as a possible option.
Note that states which had ceased participation early in the federally funded unemployment programs will need to reapply to get access to this short term extension, if indeed it is passed.
To Extend or Not?
Which States Ended Unemployment Benefits Early?
Following recent job reports that showed a shortage of workers to fill open positions, many Republican led states have now ended federally funded pandemic unemployment programs in order to incentivize workers to return to work. You can see the table below for when states ended one or more of the pandemic unemployment programs early.
|States Ending Unemployment Early|
|$300 FPUC, PUA, PEUC, MEUC|
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Number Of Potential Job Seekers Decrease
The number of persons who were not in the labor force but who would like to take a job fell by 349,000 to 5.4 million in February 2022. This figure was 5.0 million in February 2020. These people were not classified as unemployed since they either were not actively looking for work during the four weeks preceding the survey or were unavailable to take a job. The number of discouraged workers, those who believed that no jobs were available for them, fell slightly during the month, from 408,000 in January 2022 to 391,000 in February.
How To Use The Unemployment Rate
Keep in mind that the unemployment rate is a lagging indicator. It tells you what has already happened, since employers only lay off workers after business slows down.
The unemployment rate isn’t lagging as much as usual because the pandemic is still creating sudden changes.
Companies resist hiring new workers when a recession is over until they can be sure that the economy will stay strong. The economy could improve for months, and the recession could be over before the unemployment rate drops. It’s not suitable for predicting trends, but it’s useful for confirming them.
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$10200 Unemployment Tax Break
Normally, you would have to pay regular taxes on any unemployment benefits youve received, but the new bill gives a tax exemption to the first $10,200 of unemployment insurance received in 2020.
Details on how exactly to claim the exemption will become more clear after the IRS issues guidance to taxpayers.
If you filed jointly, and both spouses received unemployment benefits, the text of the law implies both spouses should each be able to claim the exemption.
If you already filed your tax return for 2020 and paid taxes on any unemployment benefits received, you can submit an amendment to get that money back. If you havent filed yet, youll be able to reduce your unemployment income by $10,200.
If you filed online, you should use the same software to file your amendment known as Form 1040-X. If you worked with a professional, follow up with them to make sure the form is submitted accurately and on time.
How Is The Natural Unemployment Rate In The United States Calculated
To calculate the natural unemployment rate, two other metrics are needed: the frictional and structural unemployment rates.
The formula adds together both of these rates and what results are what the natural unemployment rate is consistent with full employment. Full employment refers to a tight where there is no unemployment. Currently, the US Federal Reserve estimates the natural unemployment rate to stand at around 4.6 percent.
The central bank believes that the rate will drop steadily through 2030. A report released by the Congressional Budget Office stated that “The unemployment rate is projected to decline through the remainder of 2021 and the first half of 2022 before returning to a level slightly above the noncyclical rate of unemploymentconsistent with their historical average relationship.” This accounts for the devastating impact the pandemic has and continues to have on the labor market.
How many people are considered “long-term” unemployed in the US?
The BLS has reported that around 2.2 million workers have been out of a job for more than twenty-seven weeks, representing around a third of all unemployed people in the country. The number of permanent job losers declined in
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