Good Morning!
Jobless claims and stabilized rents are our topics of discussion today.
We found out yesterday that initial claims for unemployment fell slightly to 411,000 last week. Now that may not sound too newsworthy, until I mention the fact that as of the end of April, there were a record 9.3 million job openings in the United States.
So, how are jobless claims still at such high levels when companies are starving for workers?
Economists have offered a few explanations, the most controversial of which is that current unemployment benefits are too generous to entice people to reenter the workforce.
25 states have announced they are ending their participation in the federal $300-per-week program before its September 6 expiration, with 12 already having done so. According to the job site Indeed, so far there’s been no uptick in job searches in the 12 states that have already left the program.
Does this mean the federal benefits are not the reason for our labor shortage?
It’s too soon to tell. Remember that when states began leaving the program in late May, Indeed reported that job searches jumped 5% the day the announcements were made. It’s possible that people began looking for jobs before these 12 states ended the benefits, so there wasn’t a bump after they expired.
One week from today, we will get the June employment report, and a slightly clearer picture of the job market. But don’t expect a definitive answer to this question just yet, as it’s still too early to tell.
I’m sure many of you remember Don Roberto proclaiming “The rent stays like before.” to a young Vito Corleone in “The Godfather Part II.” (And who could forget Roberto’s many failed attempts at opening the door on his way out of Vito’s office?)
The Rent Guidelines Board made a similar announcement yesterday, recommending a rent freeze for stabilized rents in the first half of new one-year leases, followed by a 1.5% second-half increase. New two-year leases will go up 2.5% starting in October.
To nobody’s surprise, this announcement upset both tenants and landlords. Tenants never want their rent to go up—especially during a pandemic—while landlords argue that their costs keep rising, so they should be allowed to increase rents.
There are roughly 1.2 million rent-regulated units in New York City, and they comprise a little more than half of all rental units. These annual rent increase announcements have a huge impact on millions of lives, so it is no surprise they get uglier each year.
One thing’s for sure: With the 2019 changes to the rent stabilization law, these votes—and the arguments around them—aren’t going away any time soon.