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Comment by koheripbal | Hacker News Reader

I don't understand why Wall Street estimated that unemployment would continue to 20% (would have been a post-WWII high), despite the news that multiple states had already opened back up.

Anecdotally, I can attest that the married couples in our suburb are desperate to go out on date-nights again. I imagine that's similar everywhere - and the news certainly confirms that people aren't afraid of the virus (even if they should be). ...and since restaurants are desperate to re-open to pay the bills, it seems clear that they'd want to re-hire staff.

The real question is whether the re-openings and/or the protests will cause a large enough 2nd peak of the virus to cause additional closures over the summer - or impact the expectation of closures again in the fall.

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It appears to largely be a manipulation / changes in the reporting -- Here's the FAQ attached to the report:

https://www.bls.gov/cps/employment-situation-covid19-faq-may...

> In the establishment survey, workers who are paid by their employer for all or any part of the pay period including the 12th of the month are counted as employed, even if they were not actually at their jobs.

> The household survey is conducted by the Census Bureau and normally includes both in-person and telephone interviews, with the majority of interviews collected by telephone. Interviewing for the household survey began on May 17th, 2020. ...

> In May about three-quarters of the interviewers at these centers worked remotely to collect data by telephone.

> In April, BLS made changes to the establishment survey net birth-death model used in the estimation process. These changes were continued in May. However, after further research, BLS extended the estimation modifications back to March. This change contributed to the revision for March.

> During their review of household survey data for May, BLS staff tested for outliers to determine whether any changes were needed to the seasonal adjustment models. BLS staff determined that, as in April, the vast majority of household survey data series had significant outliers in May. Therefore, BLS staff made adjustments to the models used in seasonal adjustment processing to better account for these outliers.

> Of the 8.4 million employed people not at work during the survey reference week in May 2020, 5.4 million people were included in the “other reasons” category, much higher than the average of 549,000 for May 2016–2019 (not seasonally adjusted). BLS analysis of the underlying data suggests that this group included workers affected by the pandemic response who should have been classified as unemployed on temporary layoff. Such a misclassification is an example of nonsampling error and can occur when respondents misunderstand questions or interviewers record answers incorrectly. BLS and the Census Bureau are investigating why this misclassification error continues to occur and are making changes for the June collection. (See item 14 below.)

Thanks for this - I figured there had to be at least a partial explanation related to methodology, but this is the first I've seen of the details.

It's common for them to add a FAQ to the report - I don't see how any of these points would have "manipulated" the data to the huge degree that we've seen.

If anything, the first point would mean that the prior jobless numbers were higher than they should have been.

I agree with you that "manipulated" seems like an exaggeration, these notes all involve decisions that don't seem unreasonable. But however you slice it, it's hard to interpret that first point as a good sign for the future---how long do you think employers will continue to pay employees who are not actually working?

The correction would be about 3% if we reclassify those as unemployed: https://www.bls.gov/news.release/pdf/empsit.pdf

> If the workers who were recorded as employed but absent from work due to “other reasons” (over and above the number absent for other reasons in a typical May) had been classified as unemployed on temporary layoff, the overall unemployment rate would have been about 3 percentage points higher than reported (on a not seasonally adjusted basis). However, according to usual practice, the data from the household survey are accepted as recorded. To maintain data integrity, no ad hoc actions are taken to reclassify survey responses.

If you apply the correction, the rate would be 16.3%.

great summary. Props.

Adp said we lost 2.8 million. The government number is saying something else. We have had close 2 millions jobs lost per week for a while. For context 2 million jobs in a week would be highest number ever in the history of the US, and we have been doing that for a while.

Different date ranges, I believe.

Here's ADP's latest report : https://adpemploymentreport.com/2020/May/NER/NER-May-2020.as...

ADP's report has some revised methods, too: https://adpemploymentreport.com/common/docs/ADP-NER-FAQ.pdf

Right - but it isn't the same date range as the DoL report.

Wall Street is simply acutely aware that the global economy is highly leveraged and switching off the entire economy is likely to end very badly if a de-leveraging were to take place. Thankfully that did not happen.

EDIT: Of course, some hedge funds that were leveraged something like 100x on risk parity and correlation blew up almost instantly and caused a momentary liquidity crisis, but that was bound to happen :)

> I don't understand the Wall Street estimates that unemployment would continue to 20%, despite the news that multiple states had already opened back up.

The aftershocks are going to go on for a while. Evictions, pay cuts, restrictions on restaurant capacity in the reopenings, bankruptcies, collapses of a bunch of small businesses.

Musical chairs only call when the music stops. And the central bank is the band.

IMO you are oversimplifying things... but even with your analogy, the Fed is predicting a more dire future: https://www.frbatlanta.org/-/media/documents/cqer/researchcq...

...that document days it's not an official forecast just data model numbers without any adjustments

"GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the model.

In particular, it does not capture the impact of COVID-19 beyond its impact on GDP source data and relevant economic reports that have already been released. It does not anticipate the impact of COVID-19 on forthcoming economic reports beyond the standard internal dynamics of the model."

I think people who aren't making less than say, $50k a year are wildly underestimating the positive impact the extra $600 a week in unemployment is having. It was a huge win that (probably fortunately) slipped under the table during the bill negotiation.

Since most states unemployment insurance (UI) only pays a percent of full regular wages, it should have been "up to an additional $600 / week up to 100% (including state UI) of previous average weekly reported wages."

So, if Bob made on average $800 per week, and his state pays UI at 60%, his state UI would be $480 / week leaving him $320 short per week. The additional federal money should have paid $320 / week to get him back to 100% of his $800 / week average.

No, I disagree. The fact that people are getting more in UI than they made at their job is a feature, not a bug. First, we don't want people working in close quarters if they don't have to be. Second, It's almost a backdoor minimum wage increase, helping the neediest, who also happen to have the highest marginal propensity to consume. This has kept the economy actually relatively propped up. It's basically what people in 2008-2012 were screaming for, but never happened and it caused a dragged out recovery.

Want to recover an economy? Literally just give people who don't have any money some money. It's that simple. And in a few years when everything settles down and there's been formal studies, I think expanded UI will prove it.

Hmmmm... while it may be beneficial, I have serious difficulty believing that Congress really put that much thought into it. I'm more inclined to think it's a beneficial bug.

Yeah, this is my thinking too. The Fed is going to continue pumping money into the markets to prop up prices. But they can't magically fix systemic issues within the economy itself. Providing liquidity (read, buying high-risk assets at a premium so institutional investors don't lose their asses) only works when investors are being forced to sell well-functioning assets at a discount due to a lack of buyers in the market (which is not the case currently).

It's easy to prop up the stock price of a business, but if that company is still operating in a harsh economic environment, they still might need to cut staff and production, or could even go out of business.

At this point, I really have no idea how bad things really are for businesses. Our clients seems cautiously optimistic: most are spending money; some have budgets allocated for projects, but are holding off pulling the trigger for a few months; and a few have cancelled projects. The nation is also seeing layoffs in non-retail sectors, but again, it's hard to say if this is because companies are using COVID as cover for something they've been wanting to do, or if this is the start of the downward spiral.

My out-of-my-ass prediction is we see another, more substantial market retraction in September-October which has more staying power. And I don't think the cause will be COVID-related (but that's what the media will report), but instead will be the result of a collapse in supply chains across multiple industries as China-US relations further deteriorate, hampering the ability for manufacturing companies to buy raw materials combined with continuing bankruptcies in the agricultural sector.

A Chinese invasion of Taiwan seems likely as well, especially given the domestic strife in the US that has leaders calling for military show-of-force. Weak US military morale / power struggles within the military, combined with a focus of attention inward should provide an opportunity for the Chinese to act unopposed.

The desire to go out is very unevenly distributed. I know people who are desperate to go out, but I also know people who plan to mostly stay in until there's a vaccine, and they struggle to believe the first group really means what they're saying. ("They must be trolling", I've heard from multiple friends.)

We are not. You’re free to throw away another year of your life cooped up indoors because of a miniscule (for most people) risk that is not going anywhere, but most people will choose otherwise.

Oh yeah, don't get me wrong, I'm very aware of that. But I think a lot of smart people aren't, and I think that's affecting their predictions of how quickly the economy will open up.

It seems unfair to characterize anyone's response this way ("cooped up," "throw away").

People have adjusted to situations that are not ideal. People will have different comfort levels over time, and they will attempt to reconcile those two things. To imply that a life without Sunday brunch is somehow lesser or worse is myopic.

> To imply that a life without Sunday brunch is somehow lesser or worse is myopic.

It is worse. Claiming otherwise would be arguing that immunocompromised, sedentary, etc folks are just as privileged as myself.

Is it worse, or is it different? Life is what you make of it. I don't have a yacht or box seats at Yankee Stadium and don't think my life would be appreciably better if I did.

Ultimately people are making compromises and finding ways to live within them. People do this every day, with or without pandemics.

I'm somewhere in the middle, have understood the risks are mostly not for my demographic, and have gone outside to do things like get coffee / exercise almost every day since lockdown began.

Even then I'm aware we're still completely in the dark of what long term effects this might have. Do you have any worries about that? That along with the viral load research makes me pause when people are itching to just get "back to normal."

> Even then I'm aware we're still completely in the dark of what long term effects this might have. Do you have any worries about that?

Nope. I don't have time for (what I see as) irrational paranoia. I've judged the risk to be small enough where if that happens to me, it's OK.

It’s in the same family as cold viruses. There’s no reason a healthy person won’t recover. If you’re at risk and get in ICU there could be long term issues but that’s a small risk for healthy people.

This is pretty reductionist and simplistic. H1N1 variants were in the same family as influenza D.

One killed 17-50 million people in two years, the other is not yet known to even infect animals.

Realistically appraising risks, there are 3 reasons for limiting activity:

1) You're in a high-risk demographic: 70+, have health problems, lack access to high-level health care facilities.

2) You interact with people who are in high-risk demographics: nursing home staff, service industry where your customers are elderly, medical staff.

3) You want to support broader transmission mitigation. Mask-everwhere is the most obvious action here, but limiting high-risk activities helps too.

It's easy to forget that tragedy of the commons also means opportunity for the individual.

Some of us, despite not being in (1) or (2), feel good about doing what we individually can to avoid another broad lockdown. Decreasing R_t through personal choices is going to be a big component of the aggregate number.

My honest reaction to this is fury, but let me instead only say that we do not agree about what is best for the commons, and I will never allow you to coerce me into going along with your plan.

I read the parent comment like four times and did not see any hint of coercion. It is expressed as a personal approach.

Just being candid, in case anyone is under the delusion that it might be worth trying.

My personal decisions require neither your cooperation nor consent.

I do what I do to mitigate the spread, not because I expect you to do the same, but because it's what I feel is right.

Let no man pull you low enough to hate him.

Then you have my respect, and hopefully it has a net-positive effect.

And you mine. We're all in this together, but we each get to make our own choices. Always!

Especially in a culture that puts the individual and his “needs” above those of the larger group. But why should the public good be a consideration?

We do not agree about what is best for the commons. You are constructing a straw monster, but the opposition is largely operating in good faith.

Yeah I struggle to believe that group is large enough to support restaurants re-opening. I don't know many that are willing to risk themselves getting ill but even the ones I do would rather stay home so that they can visit their family without risking their health.

People tend to surround themselves with like minded people. The best measure is to look at actual demand, which appears to be quite high.

Anecdotally, the restaurants around us are selling out their reservation spots for the entire week of re-opening here.

My guess would be that initial spike won't sustain them over the following months. When places round here opened they had massive queues on the first day, now its back to nothing.

Some people have never had to make a long-term social sacrifice, because society is made to cater to their interests. They feel entitled to "the way things were." I'm sure being told no was a shock.

If you’re healthy you have almost nothing to worry about.

For example, on one French aircraft carrier, 60 percent of sailors were infected (none died and only two out of 1,074 infected sailors required intensive care). https://www.navalnews.com/naval-news/2020/05/covid-19-aboard...

The wide-spread protests demonstrate that most young restaurant/bar aged goers are willing to take risks. The bars and restaurants will be packed when they re-open.

> I don't understand the Wall Street estimates that unemployment would continue to 20%, despite the news that multiple states had already opened back up.

It came from adding up numbers on [0], and I also came up with about 19.7% - so the unemployment rate dropping from 14.7% in Apr to 13.3% in May [1] is very surprising.

[0] https://fred.stlouisfed.org/series/ICSA

[1] https://fred.stlouisfed.org/series/UNRATE

Just to recommit to my prediction, there will be no second peak of the virus until the winter (in the northern hemisphere), and even then it will do about as much damage as the regular cold.

I think there are logical reasons to predict this but it seems flippant if they're not presented. Are you basing this on optimism toward treatment/vaccine?

He has a blog post in his bio of his reasons but most of it is copypasta that I've seen elsewhere with no numbers but a lot of words around every theory.

Most of my claims are speculation, and can only be proven or disproven by the passage of time. The point is that I'm on record making (somewhat poetically non-scientific) predictions. Will you check back in a year?

I'm not happy about the "copypasta" insult though. None of my writing is plagiarized, arguments that are not original to me are called out, and I spent a lot of time and effort tracking down the soundest supporting references I could find.

Even speculation should be based on some evidence and/or logic.

Pure speculation, even when proven by time, is worthless.

Non-scientific does not mean unfounded. There are plenty of citations provided (from published journal articles and preprints wherever possible) to support my speculation. They're hyperlinks, which is a bit tongue-in-cheek as an editorial choice.

> Pure speculation, even when proven by time, is worthless.

I can't agree. This essentially argues that all intuition is worthless unless it can be explained. Maybe true in a structured debate, but surely not in life.

The crux of the argument is:

1. Respiratory viruses typically evolve to become attenuated after jumping between species, and this new one will move to the "sweet spot" where all other human coronaviruses proliferate, if it becomes endemic.

2. 40-60% of people may have some level of pre-existing immunity due to previous exposure to other cold coronaviruses. This finding is coming up again and again in microbiology preprints, and it fits most observations.

Check my bio for the full essay, which actually turns into a long rant about the state of science in general.

Actually There may already be evidence of 1. happening https://www.pennlive.com/news/2020/06/upmc-doctor-says-covid...

Why would you make such a prediction, must less post it as if it is informative?

From your bio you have zero expertise in this area (beyond, I suppose, that you follow some narratives on Twitter). Your predictions are literally worthless noise.

This comment crosses into personal attack and name-calling. Please don't do those things: https://news.ycombinator.com/newsguidelines.html.

Hacker News is a conversation place, an internet watercooler. People want and need to have conversation on things they aren't experts on. Users certainly don't have to be experts to post here—that would be an entirely different kind of forum.

It is neither a personal attack or name calling.

I get that these points can seem kind of subtle or even vacuous, but it's necessary to understand that they're a thousand times more obvious to the receiver.

"literally worthless noise" is calling names in the sense that the HN guidelines use the term: https://news.ycombinator.com/newsguidelines.html.

"From your bio you have zero expertise in this area" is crossing into using someone's personal details as ammunition in an argument. https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...

"beyond, I suppose, that you follow some narratives on Twitter" is a nasty personal swipe.

Please don't do that kind of thing on HN. If you review the site guidelines you'll notice that the intended spirit is quite different.

You can't have a second peak when the first one never ended.

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