VIPs
- The Top 10 states with the highest concentration of those expecting a loss of employment income encompass 32.4% of the population, per the Census Bureau; outside tourism-centric states, CA, TX, and IL all make the Top 10 and outrank the nation’s average of 25.9%
- Initial jobless claims rose to 742,000 the week of November 14, the first increase in five weeks; more concerning are PEUC claims for extended benefits, which swelled to 4.38 million the week of October 31 and have grown by at least 150,000 for the last eight weeks
- One in six households making $100,000-$150,000 reported difficulty paying for their normal household expenses in the latest Household Pulse data, from October 28-November 9; with a majority of those making less than $35,000 reporting the same, massive stimulus cannot wait
Everything really is bigger in Texas. On July 10, 1824, Richard King was born in New York City to a poor Irish family. Loathing his indentured servitude to a jeweler at the tender age of nine, within two years, he’d stowed away on a ship to Mobile, Alabama. Fortunately, King’s cover was quickly blown, and he was forced to earn his passage. By the time he was 16, King was a captain, a steamboat pilot. In 1846, Mifflin Kenedy, his future business partner, convinced him to help run armaments along the Rio Grande River to support the Texas Revolution. By 1874, King, Kenedy & Co. monopolized control of the southern border’s river trade. All the while, King had been buying up land along Santa Gertrudis Creek, grasslands in between the Nueces and Rio Grande Rivers. What started as a 68,500-acre parcel to form King Ranch now covers 825,000 acres, a bigger expanse than the state of Rhode Island. Captain Richard King will forever be Texas royalty.
In case you’re wondering, the size of Rhode Island is 775,900 acres. Comparisons tend to end there when speaking of the two states in one sentence. The Census Bureau would say otherwise. In data released Thursday in its Phase 3 Household Pulse Survey, taken from October 28-November 9, Texas and Rhode Island both made the Top 10 list of states with the highest concentrations of those expecting loss of employment income in the next four weeks (left-side table).
Broadening out, the list above encompasses 32.4% of the U.S. population and is more than a “Who’s Who” of travel destinations. There’s more than a hit to tourism when you throw into the mix California, Texas and Illinois, respectively the nation’s first, second and fifth most populous states.
While the rankings don’t shift in terms of Gross State Product (GSP) for the aforementioned trio, The Garden State does stand out as it’s the nation’s 11th most populous but ranks 8th in terms of GSP. New Jersey’s economy outweighs its population count due to its concentration of white-collar workers – its biggest industries are Professional & Business Services (16.9%) and Real Estate (14.9%). It goes without saying many residents benefit from their proximity to Wall Street which may also be a source of anxiety with 29% of the state’s workers expecting a loss of employment in the next four weeks.
The irony is the country’s six largest banks, which collectively employ more than one million worldwide, have added 20,000 to 2020’s aggregate payrolls, the biggest increase in a decade. This year’s gains follow headcount reduction of more than 140,000 over the past eight years.
In an interview with Bloomberg yesterday, Michael Nelson, MD at executive research firm Quest Group, said, “We will have fewer people working on Wall Street at the end of next year. Despite all their profitability from investment banking this year, they are super concerned about next year.”
No doubt, the economics teams at these banks are furiously revisiting their GDP estimates for 2021 to account for the current surge in the virus. The damage has begun to manifest in the hard data. Yesterday’s headlines were filled with news that jobless claims had risen for the first time in five weeks. But that data for the week ended November 14 just scratches the surface.
The real news pertained to Pandemic Emergency Unemployment Claims (PEUC), a CARES Act program slated to expire December 31 (it should be extended in Congress’ Continuing Resolution). As you see on the right-hand graph, in the week ended September 12, those collecting PEUC numbered 1.82 million. The most recent week’s data available is for the week ended October 31 by which point the ranks had swelled to 4.38 million. For eight straight weeks, PEUC claims have risen by at least 150,000, a rate five times all prior weeks the program has existed.
The sum of states’ gross state product that foresee job losses in the left-hand table above is 34.6%, a material figure that doesn’t take into account the continued devastation to New York’s economy, which we detailed yesterday. Adding NY’s 8.3% economic input to the nation’s paints an even starker picture of 42.9% of the nation’s economic output.
Rounding out the top 5 largest states is Florida, about which we’re having a hard time drawing conclusions after its latest week’s PEUC claims filed were zero, clearly a back-office glitch (Georgia in same fluky boat). The state’s economy is clearly stressed as the Census Pulse ranked it most vulnerable to an eviction wave. Some 52% of Floridian adults are living in households not current on rent or mortgage; they are either somewhat or very likely to face eviction of foreclosure in the next two months.
But it’s not just those living no paycheck to no paycheck who are stressed. The Census also reported that one-in-six households making $100,000-$149,000 are having difficulty paying their usual expenses (tuck-in chart). The struggle to make ends meet increases at a frightening level down the income ladder with a majority of those making $35,000 or less scraping by.
The best news is that the percentage of Americans willing to take a vaccine has, according to Gallup, risen to 58% from September’s 50% read. Until then, the pressure will build inside the Beltway to relieve the economic pressure engulfing a wider swath of Americans. Everything on the fiscal stimulus front had better be bigger, and fast.