The countywide jobless rate in September, based on preliminary EDD estimates, was 5.6%, compared to 6.2% in August.

According to data, the September rate was nearly a half-percentage point above the year-ago level, when countywide unemployment stood at 5.2%.

Mecca had the highest unemployment rate countywide in September at 13.4%, followed by Coachella at 13.1%, Cherry Valley at 10%, Desert Hot Springs at 8.1% and Rancho Mirage at 7.9%.

The combined unemployment rate for Riverside and San Bernardino counties — the Inland Empire — in September was 5.4%, down from 6% in August, the EDD said.

Bi-county data indicated payrolls expanded by the widest margin in the public sector, which added 9,100 positions, mostly in the education sector, as more teachers, administrators and support staff returned from summer hiatus.

The agricultural, health services, information technology, professional business services, and trade and transportation sectors grew by an aggregate 6,300 positions.

Payrolls shrank by the largest amount in the construction sector, which declined by 2,200 jobs last month. Meantime, the financial services, hospitality and manufacturing sectors collectively shed 2,300 jobs.

Miscellaneous unclassified industries additionally contracted by an estimated 600 jobs, according to figures.

Only the mining sector was unchanged in September.

The statewide non-seasonally-adjusted unemployment rate last month was 5.3%.

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The countywide jobless rate in August, based on preliminary EDD estimates, was 6.2%, compared to 6% in July.

According to data, the August rate was more than a half-percentage point above the year-ago level, when countywide unemployment stood at 5.5%.

Mecca had the highest unemployment rate countywide in July at 14.7%, followed by Coachella at 14.2%, Cherry Valley at 11%, Rancho Mirage at 8.7% and Indio at 8.6%.

The combined unemployment rate for Riverside and San Bernardino counties — the Inland Empire — in August was 6%, up from 5.9% in July, the EDD said.

Bi-county data indicated payrolls shrank by the widest margin in the agricultural sector, which shed a total 2,500 positions. The construction, financial services, hospitality, information technology and manufacturing sectors recorded aggregate losses totaling 2,300.

Miscellaneous unclassified industries additionally shed about 700 jobs, according to figures.

In the plus column, across the IE, the health services, professional business services, public and transportation sectors increased payrolls by an estimated 10,000 positions.

Only the mining sector was unchanged in August.

The statewide non-seasonally adjusted unemployment rate last month was 5.9%.

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SACRAMENTO, Calif. (AP) — Southern California’s summer of discontent — marked by a series of work stoppages from hotels to Hollywood — has inspired labor-supporting Democrats in the state Legislature to try and change the law so striking workers can get unemployment checks while they picket for better pay and working conditions.

The bill, introduced this week, would make California just the third state to do this, joining New York and New Jersey. But unlike most states, California currently doesn’t have enough money to pay the benefits owed to unemployed workers. Business groups who oppose the bill argue making more people eligible for those checks will only make the problem worse.

Labor unions and progressive policy groups say businesses are to blame for not putting enough money into the fund that pays unemployment benefits. The fund is filled by a tax that businesses must pay per each worker. But the tax only applies to the first $7,000 of employee wages — a figure that have not changed since 1984 and is the lowest amount allowed under federal law.

The state Legislature has twice increased unemployment benefits since then, once in 1989 and again in 2001. It’s why California’s unemployment insurance trust fund “has consistently been one of the most imbalanced in the country,” said Jared Walczak, vice president of state projects for the Tax Foundation, a nonpartisan tax policy group.

“Something has to give,” he said. “Either the benefits need to be less generous or the tax is higher or both. But the state has just chosen to live on the edge for decades.”

The issue could cause one of the biggest fights in the final weeks of California’s legislative session this year, heightened by the ongoing writers and actors strike and future potential work stoppages — including a possible strike of 85,000 health care workers at Kaiser Permanente, the country’s largest nonprofit health care provider.

States usually run out of money to pay unemployment benefits during periods of high unemployment, like a recession or the coronavirus pandemic when governments forced many businesses to close. But this year, despite three years of record job growth, California estimates benefit payments will exceed tax collections by $1.1 billion. It’s the first time this has happened during a period of job growth, according to the nonpartisan Legislative Analyst’s Office.

While businesses only pay unemployment taxes on the first $7,000 of their workers’ wages, employee paychecks have been increasing. Today, the average full-time California worker in the private sector makes about $67,000 per year, according to Alissa Anderson, senior policy fellow at the California Budget and Policy Center.

“Businesses are paying a payroll tax on a smaller and smaller share of workers’ earnings over time and it’s not sustainable,” she said. “You can’t finance a program that way.”

Meanwhile, California still owes the federal government more than $18 billion, which is money that was borrowed to pay unemployment benefits during the pandemic. The state will likely spend the next 10 years paying off that debt, plus interest.

Most other states used some of the billions of dollars in federal coronavirus aid to pay off their debts. But to the consternation of business owners, California did not — and instead spent it on things like rebates for taxpayers. This year, businesses began paying an extra $21 per employee to begin paying off that federal loan. But even with that increase, it’s still not enough to cover the amount of benefits that California is paying to unemployed workers.

That’s one reason why business groups say the state can’t afford to make more people eligible for unemployment benefits.

“We are hopeful that the legislators will understand you don’t add things to the credit card when you are deeply in debt,” said Rob Moutrie, policy advocate for the California Chamber of Commerce.

But labor unions view unemployment checks as benefits that workers earn while on the job. If the government won’t let workers receive those benefits during a strike, then they are “putting their thumb on the scale on behalf of the employer” in a labor dispute, said Lorena Gonzalez Fletcher, chief officer of the California Labor Federation.

Fletcher, a former state assemblymember who tried in 2019 to pass a similar bill, said the Legislature ultimately will have to change how the state pays for unemployment benefits. But she said that the larger issue should not distract the Legislature from supporting striking workers.

“There is a problem, yes, with or without this (bill),” Fletcher said. “Making these set of workers run the risk of homelessness or food insecurity because the employers have not been part of the solution in fixing their underfunding is ridiculous.”

Raising taxes on businesses would be difficult, despite California’s reputation as a high-tax state. John Kabateck, state director for the National Federation of Independent Business, said business owners pay lots of others taxes in California.

“To allege that small business owners have not been paying their fair share is absurd and frankly insulting,” he said.

Cutting benefits would also be tough. California unemployment benefits cover about half of what a worker was previously earning, according to Anderson, the senior policy fellow at the California Budget and Policy Center.

“Many people can’t live on half their salary for very long,” she said.

The bill is authored by state Sen. Anthony Portantino, a Democrat from Southern California who is also running for Congress. Portantino said the health of the state’s unemployment insurance trust fund will be part of the conversation surrounding the bill. But he said it “shouldn’t be used as an excuse for one side or the other.”

“It’s hard to be on strike,” he said. “Some people have this romanticized view of it. There’s nothing romantic about it. This is a life-and-death family struggle for many people in California.”

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Lauren Hepler | CALMATTERS

It’s been 22 months and three unemployment appeals since Nicolas Allen’s last job in Fresno. In the time it has taken the 44-year-old graphic designer to win a fraction of the benefits that he applied for, his wife has weathered a high-risk pregnancy, his youngest son was born and his family has been pushed to the financial brink.

Now, Allen is one of thousands of Californians who say they lost jobs due to the pandemic but are still fighting lengthy legal battles over unemployment money that state and federal relief programs were designed to provide. It’s a ripple effect of earlier benefit backlogs that ensnared some 5 million people at the state Employment Development Department, which officials have said was unprepared and overwhelmed by mass job losses.

Those caught up in payment disputes say they have struggled with debt, housing and necessities like food or health care. Meanwhile, no one is publicly tracking how many appeals cases and lawsuits might end up costing workers or taxpayers in a state that still owes the federal government nearly $19 billion in unemployment debt. “It’s easier to not think the money’s there,” Allen said. “Because if I worry about it too much, it’s too painful.”

The EDD has paid out $188 billion in unemployment benefits since the first pandemic shutdowns. State and federal officials waived many ordinary application requirements as millions of claims flooded in, and the agency has acknowledged that up to $31 billion was paid to scammers in the rush to distribute money quickly. Along the way, state watchdogs say up to 1 million workers were wrongly denied benefits — many mistakenly flagged for committing fraud themselves. “Accusing people of fraud is a big deal,” said George Warner, director of the Wage Protection Program at San Francisco’s Legal Aid at Work. “And the EDD does it very casually, very frequently.” The biggest logjam of contested unemployment cases lies in a state appeals process, where more than 1 million workers have asked for a review of EDD’s decisions in their cases since March 2020.

About 880,000 of those cases have already been transferred and heard by a lesser-known state labor agency, the California Unemployment Insurance Appeals Board, where the average case is still languishing for 139 days before a hearing with a judge, federal data shows. Dozens of workers who have exhausted this state process have elevated their claims even further, to appellate or superior courts. Finally, advocacy groups and hundreds more workers have joined proposed class-action lawsuits against the EDD or its debit card contractor, Bank of America.

Both the EDD and the Appeals Board refused requests for interviews to discuss workers’ concerns and state efforts to respond. The agencies also referred some inquiries to one another or offered conflicting answers, raising questions about how delays and associated costs are being tracked. Gregory Crettol, assistant director of the California Unemployment Insurance Appeals Board, told CalMatters in a statement that the Appeals Board has hired and trained 105 judges and 100 new support staffers since the onset of the pandemic. The board is also rolling out a new online system for workers to track their cases, and officials said at an April meeting that judges are now closing almost twice as many cases per month as pre-pandemic.

Still, “Given the historic backlog of appeals,” Crettol said in a statement, the Appeals Board “anticipates it will likely take several more years to completely resolve before workload returns to normal levels.” Unemployment cases are complex and vary widely, but workers awaiting disputed funds have faced similarly dire challenges. A 33-year-old video editor in Burbank had to create a GoFundMe to restart her life during a gender transition.

A security guard In L.A. County worried whether fellow workers still seeking unemployment would end up in the homeless camps he once patrolled. A 62-year-old temp worker in Sacramento spent months terrified she’d lose her car, and a legal office manager in Southern California filed for food stamps and MediCal to survive an appeal with no end in sight. “I really feel like I’m a hostage,” said the office manager, who asked to be identified only as Carole M. and has been awaiting an appeal hearing since November. “I had no money, and I kept saying: ‘How long is this going to take?’” Fraud fury Like many of California’s COVID-era unemployment challenges, slow and unwieldy payment disputes aren’t new. But the pandemic did two things: unleash an unprecedented flood of 29 million jobless claims, and supercharge anxiety about a new generation of online fraud.

Rival politicians have seized on jobless claims filed in the name of death row inmates and YouTube rappers bragging about EDD-fueled spending sprees. Investigators attribute the bulk of pandemic unemployment fraud to organized identity theft. Unemployment attorneys, meanwhile, say they’re seeing regular workers who thought they were eligible for benefits disqualified — and sometimes charged with lying — in cases that can sometimes be explained by confusion about state forms, clerical errors, language barriers or disagreements between workers and employers. “It’s so wrong,” said Assaf Lichtash, founding attorney of Los Angeles-based Pershing Square Law Firm. “The way I see it, the EDD is punishing regular civilians that are just filing for benefits who make honest mistakes — they’re punishing them for their failure to safeguard the money from fraudsters.”

State reports have also highlighted a disconnect between the EDD’s ham-fisted approach to large-scale fraud and what some say seems like a hair-trigger impulse to flag individual workers. Organized scammers evaded the agency’s automated application systems early in the pandemic, one September 2020 report by a governor-appointed EDD Strike Team found, while the vast majority of individual workers scrutinized in manual reviews appeared to be innocent. “Processes intended to block fraud are slowing service delivery without catching fraud,” the Strike Team wrote, since just .02% of the 1.3 million cases flagged that summer appeared to be real fraud. “The cost of finding that small number of imposters is extremely high.”

A separate report last August by the Legislative Analyst’s Office found that, during the pandemic, state appeals judges overturned EDD unemployment denials up to 80% of the time. That report highlighted another sample of 1.1 million unemployment claims stopped due to fraud concerns by an EDD consultant early in the pandemic, where at least 600,000 cases were later “confirmed as legitimate” and workers saw payments needlessly delayed.

Even before COVID upended the job market, the Analyst’s Office estimated that improper unemployment denials cost workers $500 million to $1 billion a year in unpaid benefits. The agency also noted “concerning steps” at EDD in recent years that “suggest that ensuring eligible workers get benefits is not among its top priorities.” The EDD refused to discuss its approach to appeals during the pandemic. Over the past three years, the agency has invested heavily in new anti-fraud technology and sought federal waivers for some workers who may have received extra federal pandemic unemployment funds “through no fault of their own.”

For workers who still want to fight an unemployment case, the first step is to notify the EDD in writing. The EDD then transfers the case to a local office of the Appeals Board, which schedules a hearing with an administrative judge. If a worker or business still feels that their case is unresolved, they can file another appeal with the state-level office of the Appeals Board, or eventually escalate the case to a superior or appellate court. As of March, the average first-level appeals case with a judge was taking 139 days — a lag not as extreme as some other states, U.S. Department of Labor data shows, but still roughly triple the federal government’s 30- and 45-day targets for state unemployment appeals.

This kind of surge is predictable after a recession; the Appeals Board heard about 1.6 million cases in the years around the Great Recession, Crettol said. But workers like Allen, the Fresno graphic designer, have seen first-hand how pandemic cases can be complicated by a heightened focus on fraud and differing interpretations of emergency health orders. In Allen’s case, he told state officials that he quit his job in July 2021, when the Delta variant of the coronavirus was raging and his wife was instructed not to be vaccinated against COVID-19 while navigating a high-risk pregnancy. Since health precautions like masking were not strictly enforced at his in-person job as a sign installer, Allen wrote in a state appeals filing, he quit “to eliminate the risk of bringing COVID-19 home.”

One unemployment payment arrived, but then the money stopped. “I was told that it had been reported that it was a fraudulent claim,” Allen said. “Because my former employer was claiming that I quit without cause.” So began an odyssey that involved months of arguing about pandemic protocols, clerical confusion over a brief freelance gig and paperwork ping-ponging between the EDD and the Appeals Board. After the second appeal, a state judge awarded Allen about six weeks out of the six months of benefits he applied for — securing around $3,000 of the $10,000 he sought, not counting potential federal unemployment supplements available during the pandemic — but denied the rest after questioning how actively he was seeking work while caring for two children under age 2.

Across the state, some 170,000 other appeals cases are still pending, according to the most recent data reported by the U.S. Department of Labor. Crettol said the Appeals Board is encouraged that new appeals have started to decline in recent months, and cited a lower state count of 154,000 backlogged cases through the end of March — a discrepancy that he said stems from differences in how state and federal numbers are reported due to funding sources and EDD processing times. Attorneys like Lichtash add that for those stuck waiting, one challenge is a lack of information about if and when a case has been transferred to the Appeals Board from the EDD, the latter of which he called a “black hole.” The EDD said in a statement to CalMatters that it sends cases to the Appeals Board in an average of three days.

The Appeals Board offered a conflicting number: that it receives about two-thirds of appeals within a week after an appeal is filed, which Crettol said could differ due to how the two agencies track processing times. Neither agency regularly tracks the “monetary value” of appeals cases, or how much the state is being awarded or ordered to pay, spokespeople said. For workers like Allen caught in the fray, the price of being caught up in the confusion has been high.

His family slashed expenses like cable TV and was able to refinance their house, which they credit with avoiding falling behind on the mortgage. But Allen said they were still forced to borrow money from family and take on credit card debt, putting everyday luxuries like a dinner at a restaurant with their kids out of reach. “It’s horrible. I mean, we’re living off my paycheck,” said Allen’s wife, Sharon, who works in human resources. “We’ve almost divorced a few times because of it.” A path for reform? In many ways, unemployment advocates like Jenna Gerry say the pandemic has shone “a spotlight” on chronic problems with the state’s job safety net, from worker confusion over benefit denials to delays at EDD to inconsistent anti-fraud efforts.

The question she and others are asking now is whether state officials will act to change the system that has once again gone haywire, or whether workers caught up in pandemic disputes will be left to bear the brunt of the confusion. “It was a perfect storm,” said Gerry, a senior staff attorney with the National Employment Law Project. “Instead of being like, ‘Wow, that was really bad. How do we make reforms now?’ … all people want to lift up is fraud, and not actually look at the systemic issues.” The biggest underlying issue, Gerry said, is that millions of California workers — such as gig workers, undocumented workers and others in tenuous hourly positions — aren’t eligible for normal unemployment benefits. That was why the federal government started emergency jobless programs like Pandemic Unemployment Assistance.

But subsequent high rates of fraud in the emergency program have complicated conversations at the federal and state levels about whether to make elements of the program permanent to cover more workers. One potential change that advocates are watching closely in California is a plan to finally upgrade the state’s unemployment technology. The Appeals Board says it is rolling out a new system now, and the EDD is preparing to launch an effort called EDDNext.

The challenge will be ensuring that such projects are more effective than other costly upgrades after the Great Recession, which audits said buckled at the EDD during the pandemic. Among the more targeted reforms that state agencies have recommended, but which legislators have yet to act on: removing the EDD from the appeals process, expanding the role of the Appeals Board or adding a new surcharge for businesses that frivolously appeal unemployment insurance (UI) claims. “To correct state practices that have the effect of limiting UI payments,” the Legislative Analyst’s Office wrote last summer, “the state should give the appeals board the authority and responsibility to set UI policy and practices.”

As these debates drag on, some unemployment advocates and workers are taking matters into their own hands. In one Alameda County lawsuit against the EDD, the Sacramento-based Center for Workers’ Rights negotiated a February settlement to head off more payment disputes. The EDD agreed to cancel around 5,000 notices of overpayment sent to workers already past a year-long statute of limitations, and to refrain from sending other similar notices past the allowed timeframe.

The agreement applies only to workers not flagged for potential fraud, leaving attorneys to worry that others still caught up in disputes or unsure how to contest their cases will slip through the cracks. Workers marked for making false statements to EDD face severe penalties — they could be forced to repay the money at high interest, have their wages garnished or be disqualified from collecting benefits if they lose a future job. “The burden is generally put on the claimant to appeal,” said Daniela Urban, executive director of the Center for Workers’ Rights. “But these notices never should have been issued.”

Farther south, in Burbank, Madeline Maye is still seeking some form of closure two years into another proposed class action lawsuit. The timing couldn’t have been worse in mid-2020, when, in the midst of hormone therapy and a gender transition, the video editor became one of the thousands of California workers who noticed money draining from their unemployment debit cards in alleged fraudulent charges.

The next year, she joined a class action claim against the state’s debit card contractor, Bank of America, which is now awaiting a hearing date before a federal judge in San Diego. Bank of America has filed to dismiss the suit and declined to comment on ongoing litigation.

It was separately fined $225 million last year by federal regulators for what they deemed “botched disbursement of state unemployment benefits.” In Maye’s case, it took about six months to get her unemployment money back from the bank, forcing her to start a GoFundMe account to pay rent and buy essentials like new clothes to restart her life.

Her lawsuit is one of several that will test what justice might look like after the state’s job safety net failed. “I got my money back, but it was one of the worst times in my life,” Maye said. “It felt like I was alone — that no one gave a shit about me.”

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WASHINGTON (AP) — The Congressional Budget Office said Wednesday that it expects the U.S. economy to stagnate this year with the unemployment rate jumping to 5.1% — a bleak outlook that was paired with a 10-year projection that publicly held U.S. debt would nearly double to $46.4 trillion in 2033.

The updated 10-year Budget and Economic Outlook outlined stark expectations for the coming year a s high interest rates and inflation, though easing, continue to impact U.S. households and businesses.

The latest figures seemed to affirm the worst fears of many U.S. consumers and businesses. But in a reminder that the U.S. economy has seldom behaved as anticipated through the pandemic and its aftermath, the employment forecast looks very different from the pace of hiring so far this year.

The CBO estimated that just 108,000 jobs will be added in 2023, but employers added 517,000 jobs in January alone. It also assumes that inflation will ease from 6.4% to 4.8% this year, far more pessimistic than Federal Reserve officials who in December said inflation would fall to 3.5%.

The CBO separately pointed to the risks of not increasing the government’s legal borrowing authority, noting that the Treasury Department could exhaust its current “extraordinary measures” to keep the government running while President Joe Biden and House Speaker Kevin McCarthy jostle over a deal.

If tax receipts from this year’s filing season fall short of estimated amounts, the U.S. could hit its statutory debt ceiling earlier than July, according to the nonpartisan organization, which provides independent analyses of budget and economic issues to Congress.

The outlook warns about rising yearly budget deficits. In 2033, the CBO anticipates that the yearly shortfall in tax revenues relative to spending would exceed $2.85 trillion, more than double the deficit in 2022. Publicly held debt was roughly equal to U.S. gross domestic product in 2022, but it would climb to 118% of GDP by 2033.

The office says the biggest drivers of rising debt in relation to GDP are increasing interest costs and spending for Medicare and Social Security.

“Over the long-term, our projections suggest that changes in fiscal policy must be made to address the rising costs of interest and mitigate other adverse consequences of high and rising debt,” Phillip Swagel, the CBO’s director, said in a statement.

One reason why the CBO expects a slowdown this year are the actions taken by the Fed. The U.S. central bank has been trying to reduce inflation by raising its benchmark interest rates. Earlier this month the Fed raised its key interest rate a quarter-point, its eighth hike since March of last year.

The CBO expects growth to pick up once the Fed has tamed inflation and pulls back on its benchmark rates.

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www.gov.ca.gov | Contributed

California’s unemployment rate fell to historically low levels in July, while adding the state’s largest job gain since February and second largest since August 2021.

“Californians are getting back to work with record low unemployment,” said Governor Gavin Newsom. “We have historic reserves and we’re putting money back in peoples’ pockets as we continue to lead the nation’s economic recovery.”

The number of employed Californians rose for the seventh consecutive month, the state added 84,800 nonfarm jobs, and the private sector achieved full recovery from the pandemic-induced recession:

• In July, California’s unemployment rate dropped 0.3% to 3.9%, establishing a new record low going back to the official data series that started in 1976.

• The unemployment rate also dropped below the pre-pandemic level of 4.1% in February 2020 and the number of unemployed Californians fell to a 33-year low in July, falling by 46,000 persons to 759,000 persons – this number has fallen for the 13th consecutive month.

• California added 84,800 nonfarm jobs in July – the state’s largest job gain since February and second largest since August 2021, bringing the total nonfarm employment in the state to 17,618,100 jobs.

• The state accounted for 16.1% of the nation’s new jobs in July.

• California has recovered all of the private-sector jobs lost during the pandemic-induced recession.

• Number of employed Californians rose by 23,000 persons, the state’s seventh consecutive month of employment gain.

• Year-to-date, California has created 477,600 – 14.5% – of the nation’s 3,296,000 new jobs.

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WASHINGTON (AP) — Two months of sharply rising prices have raised concerns that record-high government financial aid and the Federal Reserve’s ultra-low interest rate policies — when the economy is already surging — have elevated the risk of accelerating inflation.

In May, consumer prices rose 5% from a year earlier, the largest such year-over-year jump since 2008.

Many economists see the recent spike as temporary. Others say they worry that higher consumer prices will persist. Jason Furman, a Harvard professor who was President Barack Obama’s top economic adviser, thinks the reality is more complicated. He does, however, lean toward the higher-inflation-will-persist camp.

Furman notes that while most economists expect inflation to slow from its current quickened pace, not all think it will fall back to the Fed’s preferred level of 2% a year.

The Associated Press spoke recently with Furman about why higher inflation might prove only temporary, why it might persist and whether a little more inflation is all that bad.

The interview was edited for length and clarity.

Q. WHAT’S DRIVING INFLATION UP, AND DO YOU THINK IT WILL PERSIST?

A. There’s been a lot of very temporary inflation from a set of quirks related to the economy’s reopening. For example, used car prices have absolutely soared, and other prices are getting back to where they were pre-pandemic. I don’t think anyone thinks the recent rate of price increase is going to continue. The question is, how much does it slow down? Does it slow down all the way back to the 2% increase every year we used to see? Or does it slow down less than that, and we’re left with something more like a 3% increase every year?

Q. HOW BAD WOULD 3% INFLATION BE? IS IT SOMETHING WE REALLY NEED TO AVOID?

A. I don’t actually think 3% inflation would be terrible, but it depends. If policymakers tried to lower inflation from 3% to 2%, (by raising interest rates), that could be pretty painful. If wages don’t keep up with prices, that would also be troubling. But if we want to operate the economy, year in and year out, at a higher inflation rate going forward, I don’t see that as a problem. But I do think it’s important to make policy based on the most realistic and accurate expectations for what’s happening in the future.

Q. BEYOND THE ECONOMY’S REOPENING, WHAT MIGHT DRIVE A MORE SUSTAINED BOUT OF INFLATION?

A. I think the four reasons why you might worry that inflation is going to be more persistent are, No. 1, there are some shoes that haven’t dropped yet. The biggest of them being the price of shelter — that’s rent. And then it’s something called owner’s equivalent rent, which is what it costs a homeowner to live in their home. (Both rents and home prices have risen sharply.)

Second factor is some prices are sticky. That means they don’t adjust really quickly and right away. A lot of prices change once a year, and you’re going to see more of those price changes over time. Wages also tend to be sticky. A lot of employers might in September decide on new wages for January.

The third factor is that it’s likely that demand continues to exceed supply through the rest of the year. People have a lot of money. They’re spending that money, but not everyone’s back to work, which means we can’t make everything that people want to buy.

And finally, and most speculatively, expectations for inflation play a big role in the dynamics of inflation. Could expectations change? Could they become unanchored if people start to expect more inflation? It would be self-fulfilling.

Q. HOW DOES THE CURRENT SITUATION COMPARE WITH THE SPIRALING INFLATION OF THE 1970s?

A. There’s no danger of a repeat of the experience like the 1970s. The Fed learned that lesson. They’ll never let inflation get to 10%. The 1960s is the model for what we’re going through now. Inflation crept up from about 1.5% to about 5%.

One of the troubling things in the 1960s was that wages didn’t keep up with prices, and so people saw their purchasing power, their real wages fall. I’m not saying that’s what’s going to happen now, but that is the scenario to be worried about.

Q. DO YOU THINK THE FED HAS PROPERLY ASSESSED THE RISKS?

A. They shifted policy in the right direction at their latest meeting (on June 15-16). But I think they’re going to surprise themselves that they’re going to end up with a very strong recovery in jobs, that we’re going to end up with more inflation than we expect. And so they’re going to raise rates sooner than they think they’re going to.

Q. WOULD THAT SLOW THE ECONOMY OR POTENTIALLY CAUSE A RECESSION?

A. There’s two scenarios for the Fed. The most likely one is that our unemployment rate is quite low in 2022. Inflation is running above trend. And so the choice is very easy. They’ve achieved roughly their maximum employment mandate. They raise rates. The bad scenario for the Fed would be the unemployment rate remains elevated and inflation is running at 3% and then their dual mandate will be pulling them in different directions. And I’m not sure how they would resolve that.

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WASHINGTON (AP) — The number of Americans applying for unemployment benefits fell for the sixth straight week as the U.S. economy, held back for months by the coronavirus pandemic, reopens rapidly.

Jobless claims fell by 9,000 to 376,000 from 385,000 the week before, the Labor Department reported Thursday. The number of people signing up for benefits exceeded 900,000 in early January and has fallen more or less steadily ever since. Still, claims are high by historic standards. Before the pandemic brought economic activity to a near-standstill in March 2020, weekly applications were regularly coming in below 220,000.

Nearly 3.5 million people were receiving traditional state unemployment benefits the week of May 29, down by 258,000 from 3.8 million the week before.

Businesses are reopening rapidly as the rollout of vaccines allows Americans to feel more comfortable returning to restaurants, bars and shops. The Labor Department reported Tuesday that job openings hit a record 9.3 million in April. Layoffs dropped to 1.4 million, lowest in records dating back to 2000; 4 million quit their jobs in April, another record and a sign that they are confident enough in their prospects to try something new.

“As life normalizes and the service sector continues to gain momentum, we expect initial jobless claims to continue to trend lower,″ said Joshua Shapiro, chief U.S. economist at the economic and financial consulting firm Maria Fiorini Ramirez, Inc.

In May, the U.S. economy generated 559,000 million new jobs, and the unemployment rate dropped to 5.8% from 6.1% in April. Many economists expected to see even faster job growth. The United States is still short 7.6 million jobs from where it stood in February 2020.

But employers are posting vacancies faster than would-be applicants can fill them. Many Americans are contending with health and childcare issues related to COVID-19 and with career uncertainty after the coronavirus recession wiped out many jobs for good. Some are taking their time looking for work because expanded federal jobless benefits pay more than their old jobs.

Many states are scheduled to begin dropping the federal benefits this month. Altogether, 15.3 million people were receiving some type of jobless aid the week of May 22; a year earlier, the number exceeded 30 million.

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Leave it to the Internal Revenue Service (IRS) to disappoint people twice in the same tax season. After waiting longer than usual to receive their refunds this year, many Americans who overpaid taxes on unemployment compensation in 2020 are now eagerly waiting for a second refund that the IRS said would begin to go out this month. With the month more than half over, the IRS is providing few updates.

Due to the American Rescue Plan Act, up to $10,200 is now excluded as taxable unemployment income for 2020, but because the law wasn’t passed until March 2021, many Americans who filed their taxes early may have overpaid. The IRS has said it will automatically correct these returns and that taxpayers who are due a refund, for the most part, do not need to file amended returns.

In an update on May 14, the IRS said those refunds would begin to be distributed “this week” and continue throughout the summer. Ten days later, however, many on social media are wondering if any of these checks have actually been delivered.

Reached for comment, a spokesperson for the IRS told Fast Company that distribution of the payments began last week and that “some taxpayers have received the refunds.” The spokesperson had no immediate details on how many checks have gone out, but reiterated that payments would be made throughout the summer.

The IRS, which is significantly understaffed and underfunded, has been criticized by the National Taxpayer Advocate for its lack of communications regarding refund timelines, and the vague manner in which it has rolled out the unemployment tax refunds is likely to add to that criticism.

One issue seems to be the lack of an adequate tracking system for the payments, with users on social media complaining that the “Where’s My Refund?” tool is not providing them with the proper updates. The IRS did not respond to a followup question about whether it offers a way for taxpayers to track these refunds. In its update earlier this month, it merely said it would send out a notice to taxpayers informing them of their corrected returns within 30 days.

One banking official who spoke with Fast Company on the condition of anonymity said banks were unable to determine if the unemployment tax refunds were being delivered because the transactions would be difficult to distinguish from traditional tax refunds, which are also currently being distributed. Sadly, if you’re eligible for one of these refunds, there doesn’t seem to be a whole lot you

can do besides keep checking your bank account and wait for additional details. We’ll post an update when we know more.

Christopher Zara | Contributed

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Christian Jeremyah James, 31, and Armand Caleb Legardy, 32, each pleaded guilty in separate hearings to one count of use of unauthorized access devices, the U.S. Attorney’s Office said in a statement on Monday.

James, of South Los Angeles, worked in the Culver City Main Post Office, while Legardy, of Inglewood, worked in the La Tijera Post Office in South Los Angeles.

Prosecutors said the pair obtained debit cards that the California Employment Development Department (EDD) had issued to other people for unemployment insurance benefits. The cards were obtained by other unidentified individuals using stolen identities and false information, prosecutors said.

As part of a plea agreement, James and Legardy admitted they used debit cards the EDD had issued to other people in order to purchase or cash money orders from the USPS and to withdraw thousands of dollars in cash from bank ATMs between August last year and February, prosecutors said.

They also admitted that they deposited multiple fraudulently purchased postal money orders directly into their own bank accounts.

James deposited more than $27,000 worth of postal money orders into his bank account between September 3 and 19 last year, while Legardy deposited more than $10,000 in postal money orders that had been illegally purchased with EDD-issued cards in other people’s names, prosecutors said.

They said James admitted to knowingly using at least eight EDD-issued debit cards in other people’s names and causing a loss of around $142,652. Legardy admitted to illegally using nine EDD cards and causing a loss of around $160,879.

United States District Judge George H. Wu has scheduled a sentencing hearing on September 30 for Legardy, and on October 7 for James.

Each defendant could face a statutory maximum sentence of 10 years in federal prison then, prosecutors said. The USPS and the EDD have been contacted for comment.

California officials have discovered billions of dollars in fraud in the state’s unemployment system over the past year. An investigation also discovered that millions of dollars worth of fraudulent claims were paid out to prisoners, including inmates on death row.

An audit of the EDD earlier this year found the state was hit with over 1,000 suspicious claims per day at the start of the pandemic and blamed California Gov. Gavin Newsom’s administration for “significant missteps and inaction.”

Khaleda Rahman | Newsweek

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