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People Receiving Pandemic Unemployment Assistance Drops by 3 Million in September - Barron's

Three numbers to start your day:

Value of Civilian Capital Goods Shipped by U.S. Manufacturers in August Hits $67.2 Billion

The figure excluded aircraft. It’s the best month since September 2014.

Total durable goods shipments have done slightly worse, given the continuing woes in the aerospace sector and a slight pullback in motor vehicle sales after a sharp spike in July. Even so, the value of total durable shipments in August was only 1% below pre-pandemic levels.

Manufacturers, with the notable exception of the civilian aerospace sector, have consistently shipped more than they have produced in the past few months because they have drawn down their inventories. The total value of durable goods inventories excluding nondefense aircraft and parts has dropped more than 2% since January.

The big question is whether manufacturers will continue to be conservative about new production or whether they will respond to the apparent recovery in demand by rebuilding their inventories.

Reported Drop of 3 Million in People Receiving Pandemic Unemployment Assistance at Beginning of September

The Labor Department attributes the change entirely to the state of California, where the number of PUA recipients apparently fell to 3.4 million from 6.4 million.

But this number doesn’t tell us anything about the state of the economy or government policy. The federal government’s data for California doesn’t match the state’s own records, with the gap at one point exceeding five million people. The issue comes from how the Labor Department counts the clearance of processing backlogs, which make it look as if far more people are getting benefits than in reality.

Even with the recent data fix, the federal numbers are still overstating the reality in California by a factor of two.

Impact of Enhanced Unemployment Benefits Varies State to State

The difference between the growth rate of personal income in Massachusetts and in Connecticut was 11.7 percentage points between the fourth quarter of 2019 and the second quarter of 2020, according to new data from the Bureau of Economic Analysis.

Overall, U.S. personal income was nearly 9% higher in the second quarter of 2020 than in the fourth quarter of 2019, thanks to the one-time “Economic Impact Payments” and enhanced unemployment benefits.

But there were large variations across states, with Connecticut residents’ personal income rising the least, while neighboring Massachusetts had the biggest gain, at 16.6%. According to the BEA, the places that had the smallest increases in personal income, such as Connecticut, Tennessee, Virginia, and New York, were the ones where residents had the smallest increases in “transfer payments” relative to pre-pandemic income.

In Connecticut and New York, personal income is concentrated among the ultrarich, who wouldn’t have qualified for the one-time payments. The opposite was true in West Virginia, which had the second-highest increase in personal income after Massachusetts.

Numbers by Barron’s is our daily podcast. Find out more here.

Write to Matthew Klein at matthew.klein@barrons.com

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People Receiving Pandemic Unemployment Assistance Drops by 3 Million in September - Barron's
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