CARY, N.C. –
Confession time. While taking some graduate degree courses, I struggled mightily with the statistics class.
The thought of standard deviations and Z tables still makes me twitch a little.
Nonetheless, I took a few moments on Thursday morning to examine the latest update on unemployment insurance weekly claims compiled by the U.S. Department of Labor. As finance companies certainly know, without gainful steady employment, their contract holders are going to struggle to maintain payment frequency.
The Labor Department said that for the week ending July 11, the advance figure for seasonally adjusted initial claims came in at 1,300,000, a decrease of 10,000 from the previous week’s revised level. The reading marked the seventh week in a row that weekly claims landed below 2 million. But it’s still been 18 consecutive weeks of claims above 1 million, including the spikes of 6.9 million on March 28 and 6.6 million on April 4.
I’m literally shaking my head after typing those statistics trigged by the coronavirus pandemic.
Some experts and politicians are saying the economy is improving and individuals are going back to work. Again, the Labor Department data shows some wobbly trends.
Federal officials also compile how many persons are claiming unemployment insurance. Here is a rundown of the last five readings, deriving from the week that ended the measurement timeframe along with the week-over-week change.
— June 27: 32,003,330, down 433,005
— June 20: 32,922,335, up 1,410,788
— June 13: 31,491,627, up 916,722
— June 6: 30,553,817, up 1,294,309
— May 30: 29,165,753, down 350,326
Again, acknowledging that statistics are not my strong suit, perhaps my assertion here is a bit skewed. But if weekly unemployment claims are growing faster than individuals coming off of programs and going back to work, this pandemic is still wrecking the economy beyond any previous measurement ever recorded.
What’s even more concerning, in my opinion, is unemployment insurance enhanced by the federal government through the CARES Act is set to expire this month.
There’s little doubt that the extra $600 per week individuals are collecting via unemployment insurance might have kept some retail installment contracts current.
While not as firm as the Labor Department data, ParentsTogether, a national parent-led organization with more than 2 million members, released the results of a survey of more than 1,500 parents from around the country, highlighting the impact the coronavirus crisis is having on families and children. The survey found that, as CARES Act funding ends this month, more families say they are struggling now than in March and April.
According to the survey results distributed this week, 70% say their “family is struggling,” up from 58% in March and 61% in April. Of those who believe they should be eligible for unemployment, 60% have not received any payments.
Some of the comments ParentsTogether shared from survey participants paints an even bleaker scene.
“I am alternating paying all my bills. It just depends on what I have in the bank for that month. A few bills I have had to skip longer than a month or two, such as water and garbage bills and I have been able to get some more time, but it only puts me further behind. I need to be able to go back to work full time and get some overtime to catch up completely,” a woman from Oregon said.
Another woman from Texas added, “I stopped paying all credit cards, had to choose between credit card payments or food/electricity. I have vulnerable family members and cannot return to work until COVID-19 cases drop, our local hospital is currently at 100% capacity. I have no health insurance and am scared to death of catching this virus, with underlying health conditions it could be lethal.”
A sincere round of appreciation to all of the finance companies who are working with customers who are in situations like described in the ParentsTogether survey. Customer-service representatives are likely to be offering assistance for some time.
“Last month’s optimism as businesses were reopening has since given way to concerns over reinforced shutdowns, announced delays in school openings and growing consumer fears. A smooth path back to normal was never likely, but it will still leave consumers and businesses more cautious until a vaccine is ready and widely available,” said Curt Long, chief economist and vice president of research for the National Association of Federally-Insured Credit Unions (NAFCU).
Nick Zulovich is senior editor of SubPrime Auto Finance News and can be reached at firstname.lastname@example.org.