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Unemployment insurance claims remain historically high: Congress must reinstate the extra $600 immediately

Unemployment insurance claims remain historically high: Congress must reinstate the extra $600 immediately



Last week 1.6 million workers applied for unemployment insurance (UI) benefits. Breaking that down: 984,000 applied for regular state unemployment insurance (not seasonally adjusted), and 656,000 applied for Pandemic Unemployment Assistance (PUA). Some headlines this morning are saying there were 1.2 million UI claims last week, but that’s not the right number to use. For one, it ignores PUA, the federal program that is serving millions of workers who are not eligible for regular UI, like the self-employed. It also uses seasonally adjusted data, which is distorted right now because of the way Department of Labor (DOL) does seasonal adjustments.

Republicans in the Senate allowed the across-the-board $600 increase in weekly UI benefits to expire. Last week is the first week of unemployment in this pandemic that recipients will not get the extra $600 payment. That means people on UI benefits who lost their job during a global pandemic are now are forced to get by on around 40% of their pre-virus earnings, causing enormous pain.

Republicans in the Senate are proposing to (essentially) replace the $600 with a $200 weekly payment. That $400 cut in benefits is not just cruel, it’s terrible economics. These benefits are supporting a huge amount of spending by people who would otherwise have to cut back dramatically. The spending made possible by the $400 that the Senate wants to cut is supporting 3.4 million jobs. If you cut the $400, you cut those jobs. The map in Figure A shows the number of jobs that will be lost in each state if the extra $600 unemployment benefit is cut to $200.

Figure A
Figure A

The Trump administration has floated the alternate idea of dropping the $600 to $400. First, the administration can’t do anything in this space without Congress. Further, dropping the $600 to $400 would still cost 1.7 million jobs. Because we did not put the public health measures in place necessary to successfully reopen, the coronavirus has spiked, and the jobs gains we saw in May and June have stalled, if not reversed. Now is not the time to cut benefits that are supporting jobs.

But what about the potential work disincentive of the extra $600? After all, the additional payment means many people have higher income on unemployment insurance than they did from their prior job. It turns out that the concern about the disincentive effect has been massively overblown. In fact, rigorous empirical studies show that any theoretical disincentive effect has been so minor that it cannot even be detected. For example, a study by Yale economists found no evidence that recipients of more generous benefits were less likely to return to work. A case in point: in May and June—with the $600 in place—7.5 million people went back to work. And, about 70% of likely UI recipients who returned to work were making more on UI than their prior wage. Further, there are 14 million more unemployed workers than job openings, meaning millions will remain jobless no matter what they do. Slashing the $600 cannot incentivize people to get jobs that are not there. Even further, many people are simply unable to take a job right now because it’s not safe for them or their family, or because they have care responsibilities as a result of the virus. Slashing the $600 cannot incentivize them to get jobs, it will just cause hardship.

Slashing the $600 will also exacerbate racial inequality. Due to the impact of historic and current systemic racism, Black and brown communities are suffering more from this pandemic, and have less wealth to fall back on. They will take a much bigger hit if the $600 is cut. This is particularly true for Black and brown women and their families, because in this recession, these women have seen the largest job losses of all.

Figure B combines the most recent data on both continuing claims and initial claims to get a measure of the total number of people “on” unemployment benefits as of August 1. DOL numbers indicate that right now, 33 million workers are either on unemployment benefits, have been approved and are waiting for benefits, or have applied recently and are waiting to get approved. But importantly, Figure B provides an upper bound on the number of people “on” UI, for two reasons: (1) Some individuals may be being counted twice. Regular state UI and PUA claims should be non-overlapping—that is how DOL has directed state agencies to report them— but some individuals may be erroneously counted as being in both programs; (2) Some states are likely including some back weeks in their continuing PUA claims, which would also lead to double counting (the discussion around Figure 3 in this paper covers this issue well).

Figure B
Figure B

Figure C shows continuing claims in all programs over time (the latest data are for July 11). Continuing claims are nearly 30 million above where they were a year ago. However, the above caveat about potential double counting applies here too, which means the trends over time should be interpreted with caution.

Figure C
Figure C

It is also worth noting that last week was the 20th week in a row that initial unemployment claims have been more than 1.7 times the worst week of the Great Recession. If you restrict this comparison just to regular state claims—because we didn’t have PUA in the Great Recession—last week was the 20th week in a row that initial claims have been greater than the worst week of the Great Recession.

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GBP/USD slips on strong US retail sales

GBP/USD down over half a percent US retail sales higher than expected UK inflation projected to decline on Wednesday The British pound has declined 0.56%…



  • GBP/USD down over half a percent
  • US retail sales higher than expected
  • UK inflation projected to decline on Wednesday

The British pound has declined 0.56% against the US dollar on Wednesday, wiping out yesterday’s gains. In the North American session, GBP/USD is trading at 1.2158, down 0.48%. The pound’s downswing was driven by a higher-than-expected US retail sales report.

US retail sales jump in September

Retail sales in the US surprised on the upside with a gain of 3.8% y/y in September. This beat the upwardly revised 2.9% rise in August and crushed the market estimate of 1.5%. On a monthly basis, retail sales rose 0.7%, compared to an upwardly revised 0.8% in August and well above the market estimate of 0.3%. Core retail sales, which exclude automobiles and gasoline, rose by 0.6% m/m, down from an upwardly revised 0.9% in August but easily beating the market estimate of 0.2%.

The better-than-expected retail sales report indicates that consumer spending remains robust despite the challenging economic picture, which includes high inflation and elevated borrowing costs. Consumer spending likely accelerated in the third quarter and that will be reflected in the consumer spending component of GDP.

The UK releases inflation on Wednesday. September CPI is expected to tick lower to 6.6% after a 6.7% reading in August. Inflation is at its lowest level since February 2022 but remains more than three times above the Bank of England’s 2% target. The core rate, which excludes food and energy is closely monitored by the BoE, is expected to dip to 6.0%, compared to 6.2% in August.

If inflation falls as expected or even further, it will provide support for the BoE to pause for a second straight time at the November 2nd meeting and the pound could react with losses. The Bank’s decision to hold rates at the October meeting was a narrow 5-4 vote and Governor Bailey said yesterday that he expected upcoming rate decisions to be tight as well.


GBP/USD Technical

  • GBP/USD has pushed below support at 1.2202. Below, there is support at 1.2104
  • There is resistance at 1.2281 and 1.2343

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Psychedelic Research Pioneer Roland Griffiths Passes At Age 77

A sad day in the psychedelics community today as news filters out that leading industry neuroscientist, Dr. Roland Griffiths, Ph.D., has passed. The esteemed…



A sad day in the psychedelics community today as news filters out that leading industry neuroscientist, Dr. Roland Griffiths, Ph.D., has passed. The esteemed Johns Hopkins University psychopharmacologist is described as the man who brought psilocybin back into the field of medical research for the first time in decades—notably by conducting his first clinical trial with psilocybin in 1999.

Over the years, Dr. Griffiths work has garnered substantial support through grants from the National Institute of Health, and he boasts a prolific publication record, with more than 400 journal articles and book chapters to his name. Additionally, Dr. Griffiths has played a pivotal role in training over 50 postdoctoral research fellows.

His influence extends far beyond academia, as he has served as a consultant to the NIH and lent his expertise to numerous pharmaceutical companies, aiding in the development of new psychotropic drugs. Furthermore, Dr. Griffiths has contributed as a member of the Expert Advisory Panel on Drug Dependence for the World Health Organization.

Dr. Roland Griffiths: Among The Greatest Psychedelic Researchers Of The Modern Age

NameFieldNotable ContributionsDate of BirthDate of Death
Albert HofmannChemistrySynthesized LSD, discovered its psychoactive properties, and conducted early research on the substanceJanuary 11, 1906April 29, 2008
Timothy LearyPsychologyConducted early research on LSD and became a prominent advocate for the use of psychedelics in therapy and personal growthOctober 22, 1920May 31, 1996
Stanislav GrofPsychiatryConducted research on the use of LSD in psychotherapy and developed a framework for understanding non-ordinary states of consciousnessJuly 1, 1931
Terence McKennaEthnobotanyDeveloped theories on the use of psychedelics in human evolution and consciousness expansionNovember 16, 1946April 3, 2000
Alexander ShulginChemistrySynthesized and tested hundreds of novel psychoactive compounds, including MDMAJune 17, 1925June 2, 2014
Rick StrassmanPsychiatryConducted research on the effects of DMT, a potent psychedelic, on human subjectsFebruary 8, 1952
James FadimanPsychologyConducted research on the use of microdosing LSD for personal growth and creative enhancementMay 27, 1939
Roland GriffithsPsychiatryConducted research on the use of psilocybin, the active ingredient in magic mushrooms, for treating depression, anxiety, and addictionJuly 19, 1946October 16, 2023
William RichardsPsychiatryConducted research on the use of psilocybin in end-of-life care and spiritual experiences
David NuttPsychiatryConducted research on the safety and potential benefits of various psychoactive substances, including LSD and psilocybinApril 16, 195

Dr. Griffiths’ research portfolio encompasses a wide array of substances, including sedative-hypnotics, caffeine, and novel mood-altering drugs. In 1999, he embarked on an ambitious research program delving into the effects of the classic psychedelic psilocybin. This initiative encompasses studies involving healthy volunteers, individuals beginning their meditation journeys, and seasoned religious leaders.

Notably, therapeutic studies with psilocybin have explored its potential in alleviating psychological distress in cancer patients, aiding in smoking cessation, and even treating major depression.

Beyond psilocybin, Dr. Griffiths’ investigations have ventured into substances like salvinorin A, dextromethorphan, and ketamine, all of which induce altered states of consciousness sharing certain similarities with psilocybin. His research also delves into the intricate domain of drug interactions and employs advanced brain imaging techniques, such as fMRI and PET, to dissect the pharmacological and neural mechanisms underlying these effects.

Within the confines of the Hopkins laboratory, a series of internet surveys have cast light on diverse psychedelic experiences, including those associated with acute and enduring adverse effects, mystical encounters, entity and God-encounter phenomena, as well as reported positive shifts in mental health. These positive changes encompass reductions in depression, anxiety, substance abuse, and improvements in overall well-being.

Although Dr. Griffiths will not be around to see all the fruits of his labor, his influence of his legacy will reverberate well beyond his passing. One of the psychedelic industry’s true shining lights.

Notable Research Papers

Notable Media Appearances

The post Psychedelic Research Pioneer Roland Griffiths Passes At Age 77 appeared first on The Dales Report.

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Chip Stocks Tumble After US Restricts Sale Of Made-For-China Chips

Chip Stocks Tumble After US Restricts Sale Of Made-For-China Chips

Chip stocks tumbled pre-market, led by shares of Nvidia, after a US official…



Chip Stocks Tumble After US Restricts Sale Of Made-For-China Chips

Chip stocks tumbled pre-market, led by shares of Nvidia, after a US official confirmed that exports of the company's A800 and H800 chips will be restricted for sale to China, Bloomberg reports. The chips were specifically created for export to China following restrictions introduced by the Biden administration in October of 2022.

The rules restrict exports of chips to foreign arms of companies headquartered in China, Macau and other regions - however chips designed for consumer applications such as gaming, smartphones or laptops are not subject to the requirement.

According to report, the US Treasury Secretary, Commerce Secretary and National Security Advisor all notified China that the update to the Oct 2022 rule on chips and chip tools would impact exports of said newer chips.

The new rules also require companies to notify the US government before selling chips that fall below the controlled threshold, as Bloomberg reported earlier. Top-of-the-line chips are best for powering artificial intelligence models, a senior administration official said. But with a lot of money and a little jury-rigging, a whole class of slightly inferior chips could also be used for AI and supercomputing and therefore pose a national security risk, the official said.

The US wants to monitor that so-called gray zone activity, the official added, while declining to comment on the specific parameters of which chips will be affected. The administration will review company notifications within 25 days, the official said, to determine whether firms need a license to sell those chips to China. -Bloomberg

NVidia was down as much as 12% pre-market following the announcement, and as much as 7.2% during regular trade.

"It’s difficult to draw a bright line between military and commercial technology," said US Commerce Secretary Gina Raimondo ahead of the decision. "There are often dual-use technologies — and the same technologies that fuel commercial exchange, unfortunately, sometimes can also allow our competitors to modernize their military, surveil their citizens and solidify oppression."

Semis are not happy in general:

Will history rhyme?

As we noted on Friday, Reuters reported that the Biden administration was targeting a loophole that has allowed developers in China to purchase chips from the infamous Huaqiangbei electronics area in Shenzhen, a city in southern China.

The sources reportedly claim that the additional rules on AI chips will come out this month and will apply restrictions previously applied only to the U.S.’s top players like Nvidia and AMD but more broadly to all companies producing similar materials in the market.

Over the summer, the U.S. government applied additional rules to its largest chip makers, including Nvidia, which currently leads the market in chip manufacturing. It asked the companies to curb exports of their high-level semiconductor chips to “some” Middle Eastern countries, among other small details.

The majority of Nvidia’s revenue comes from the U.S., China and Taiwan, while less than 14% comes from all other countries combined.

Reuters' sources have said that the Biden administration is also trying to troubleshoot a loophole that allows Chinese parties access to U.S. cloud service providers like Amazon Web Services (AWS). According to the report, those solutions seem “less clear.”

In July, U.S. officials reportedly began their considerations on restrictions on access to cloud computing services such as AWS by Chinese companies in an effort to safeguard the country’s advanced technology.

The U.S. implemented its initial export controls on its most powerful semiconductor chip technology in October 2022.

On Monday, Chinese Foreign Ministry spokeswoman Mao Ning said during a regular press briefing in Beijing that China opposed "the US politicizing, instrumentalizing and weaponizing trade and tech issues."

Tyler Durden Tue, 10/17/2023 - 09:03

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