Please consider the Results of SurveyUSA Coronavirus News Poll.
Key Findings
- 9% of Working Americans (14 Million) So Far Have Been Laid Off As Result of Coronavirus; 1 in 4 Workers Have Had Their Hours Reduced;
- 2% Have Been Fired; 20% Have Postponed a Business Trip; Shock Waves Just Now Beginning to Ripple Through Once-Roaring US Economy:
- Early markers on the road from recession to depression as the Coronavirus threatens to stop the world from spinning on its axis show that 1 in 4 working Americans have had their hours reduced as a result of COVID-19, according to SurveyUSA’s latest time-series tracking poll conducted 03/18/20 and 03/19/20.
- Approximately 160 million Americans were employed in the robust Trump economy 2 months ago. If 26% have had their hours reduced, that translates to 41 million Americans who this week will take home less money than last, twice as many as SurveyUSA found in an identical poll 1 week ago. Time-series tracking graphs available here.
- 9% of working Americans, or 14 million of your friends and neighbors, will take home no paycheck this week, because they were laid off, up from 1% in an identical SurveyUSA poll 1 week ago. Time-series tracking graphs available here.
- Unlike those laid-off workers who have some hope of being recalled once the worst of the virus has past, 2% of Americans say they have lost their jobs altogether as a result of the virus, up from 1% last week.
- Of working Americans, 26% are working from home either some days or every day, up from 17% last week. A majority, 56%, no longer go to their place of employment, which means they are not spending money on gasoline or transit tokens.
About: SurveyUSA interviewed 1,000 USA adults nationwide 03/18/20 through 03/19/20. Of the adults, approximately 60% were, before the virus, employed full-time or part-time outside of the home and were asked the layoff and reduced-hours questions. Approximately half of the interviews for this survey were completed before the Big 3 Detroit automakers announced they were shutting down their Michigan assembly lines. For most Americans, events continue to unfold faster than a human mind is able to process the consequences.
Grim Survey of Reduced Hours
Current Unemployment Stats
Data from latest BLS Jobs Report.
If we assume the SurveyUSA numbers are accurate and will not get worse, we can arrive at some U3 and U6 unemployment estimates.
Baseline Unemployment Estimate (U3)
- Unemployed: 5.787 million + 14 million = 19.787 million unemployed
- Civilian Labor Force: 164.546 million (unchanged)
- Unemployment Rate: 19.787 / 164.546 = 12.0%
That puts my off the top of the head 15.0% estimate a few days in the ballpark.
Underemployment Estimate (U6)
- Employed: 158.759 million.
- 26% have hours reduced = 41.277 million
- Part Time for Economic Reasons: 4.318 million + 41.277 million = 45.595 million underemployed
- 45.595 million underemployed + 19.787 million unemployed = 65.382 million
- Civilian Labor Force: 164.546 million (unchanged)
- U6 Unemployment Rate: 65.382 / 164.546 = 39.7%
Whoa Nellie
Wow, that’s not a recession. A depression is the only word.
Note that economists coined a new word “recession” after the 1929 crash and stopped using the word depression assuming it would never happen again.
Prior to 1929 every economic slowdown was called a depression. So if you give credit to the Fed for halting depressions, they haven’t. Ity’s just a matter of semantics.
Depression is a very fitting word if those numbers are even close to what’s going to happen.
Meanwhile, It’s no wonder the Fed Still Struggles to Get a Grip on the Bond Market and there is a struggled “Dash to Cash”.
Very Deflationary Outcome Has Begun: Blame the Fed
The Fed is struggling mightily to alleviate the mess it is largely responsible for.
I previously commented a Very Deflationary Outcome Has Begun: Blame the Fed
The Fed blew three economic bubbles in succession. A deflationary bust has started. They blew bubbles trying to prevent “deflation” defined as falling consumer prices.
BIS Deflation Study
The BIS did a historical study and found routine price deflation was not any problem at all.
“Deflation may actually boost output. Lower prices increase real incomes and wealth. And they may also make export goods more competitive,” stated the BIS study.
For a discussion of the study, please see Historical Perspective on CPI Deflations: How Damaging are They?
Deflation is not really about prices. It’s about the value of debt on the books of banks that cannot be paid back by zombie corporations and individuals.
Blowing bubbles in absurd attempts to arrest “price deflation” is crazy. The bigger the bubbles the bigger the resultant “asset bubble deflation”. Falling consumer prices do not have severe negative repercussions. Asset bubble deflations are another matter.
Assessing the Blame
Central banks are not responsible for the coronavirus. But they are responsible for blowing economic bubbles prone to crash.
The equities bubbles before the coronavirus hit were the largest on record.
Dollar Irony
The irony in this madness is the US will be printing the most currency and have the biggest budget deficits as a result. Yet central banks can’t seem to get enough dollars. In that aspect, the dollar ought to be sinking.
But given the US 10-year Treasury yield at 1.126% is among the highest in the world, why not exchange everything one can for dollars earning positive yield.
This is all such circular madness, it’s hard to say when or how it ends.
Mike “Mish” Shedlock
I put myself on a work slow down. I will lay myself off to join the others. Now where do I apply for benefits. I always wanted to collect. Misch do a piece on the coming reset in Real Estate.
Mish – I’d like to believe that it’s ONLY 9%. To me, that would be a win. But, literally everything (and everyone associated with those businesses) is in the process of shutting down. We’re looking at 25% unemployment pretty quickly and that will have a dramatic effect on peoples’ psyche…
I would give this about a month. Eventually people will decide it’s better to risk infection. And there will be rioting in some areas.
As one “pandemic expert” said: the panic is worse than the virus. In fact that seems pretty obvious. My wife & I are 70+ but we’re not worried about it; but then, we don’t live in a big city.
Thing is, the rational thing to do, is to get out of the way of contagion. Just sit home, pay for only that which otherwise result in immediate consequences. Until its largely over. A year or some from now, at a natural rate.
It looks as if panic’ing even harder than that, and shutting everything down completely as they did in Wuhan, would be even more rational, as it dramatically both shortened time under siege hence economic fallout, and lowered ultimate casualty count.
But that course of action requires sufficient competence to know when and how to properly panic. As in, it requires some minimum levels of competence. Which, as always, is very far from what life in The Age of Incompetence is all about…
“The Fed is struggling mightily to alleviate the mess it is largely responsible for.”
But this is not how it will be portrayed as. It will be portrayed as if this serial bubble blower has done something heroic and saved the world. When the reality is the Fed is an economic arsonist who also runs a fire extinguisher by virtue of being a 2-trick pony (interest rate and printing press) . If you can find bigger scoundrels please give me a call.
There’s no “solution” to this problem except to ride it out. We created it. We own it. We deserve the consequences.
And by “we” I mean those of us in the United States.
Why do we own it?
Because we elected a “leadership” cadre – from at least the states up – who collectively look like a bunch of monkeys trying to land an L1011 full of passengers – flipping every switch, turning every knob, pushing every button, and just twisting the wheel – hoping something will work while simultaneously throwing shit at each other.
For the past nearly 100 years, we’ve kept electing them. So yeah – we deserve it.
And I have $1000 (or should I make that a trillion given the coming hyperinflation) that says if we make it out of this, we will keep electing them.
People are too stupid for democracy.
And evidently too stupid for a representative constitutional republic as well.
…and democracy too stupid for non stupid people.
Founding Fathers in the USA even knew that (Senate for example). But today even Senators show no leadership and just ape what the lowest element of the voting public wants.
You are absolutely right especially in the red states with a Third World quality of life. They get what they deserve.
“Central Banks are not responsible for the CV”. I’ll be going to my grave doubting that statement. The timing, and eventual outcome will be way too perfect (for all the Big Boys that cashed out at the peak) for this to be just a happy coincidence. I mean you get a once-in-a-lifetime pandemic on the very eve of the “real” once-in-a-lifetime banking crisis? C’mon. The banksters knew full well that sans a credible scapegoat, they would be blamed for the 2020’s depression – after all the bailout dust settled. But now there will be no blame, no punishments, no memory, no reforms, only rescue packages.
I hear what your saying. The trade volume of the Dow appears to have distinctly picked up around the summer of 2016 compared to since the previous GR. As if people were finally gaining confidence back in the market and a new crop of fresh young sheep were all lapping it up too. Well, now the sheep are being led to slaughter and the people are having their milkshakes drunk. Meanwhile, the devil (the Fed) slithers off during the ruckus to create mischief another day…
My family doctor is laying off the other physicians in his office as everyone has cancelled their appointments. Some staff will stay to man the ship, barebones staffing. The doctors will do okay not working for a couple of weeks, the staff not so much. My friend is a dentist and he just closed his practice for a couple of weeks also. A few weeks is probable okay, but I am thinking its going to be a lot longer like 4-6 weeks nationwide. That will be devastating. I don’t know what the correct policy response for this is but the helicopter money actually seems appropriate. What else can we do. If the f’ing deficit wasn’t so high the budget hit would be tolerable but we are starting with a national debt that I don’t think was even surpassed in WW2.
How about if the helicopter money lands everywhere except in your hands. Would you be cool with that?
I am not sure what you mean by creditors, banks? I will check out the blog you posted. I think the direct checks to citizens are a different animal than bailing out Boeing or the airlines who were fiscally imprudent by buying back shares and paying lavish executive salaries. They should all be forced into bankruptcy like GM and Chrysler and then given loans with provisions of no dividends or buybacks.
“4-6 weeks nationwide”
by that time, new cases, and deaths will still be rising.
Isn’t August slowdown Trump’s hope? Someone hinted “into 2021” wrt how long LA schools could remain closed…
I’m in North Italy. While there is still some vague possibility that schools might reopen in May, the reality is that it’ll probably be September.
Even Trump who wants to put the best face on this he can says it will probably go till August. California though says that 56% of Californians will get CV in the next 8 weeks. So, it could blow itself out by June. Even then that would be catastrophic for people getting no paychecks. The economic knock on will be worse than the subprime trigger for the GFC. If it did drag on till August there just is no way to even predict the depth of what will happen to this country. I suspect from the way pigs hoarded and cleaned out the stores that would indicate a LOT of people are going to be tearing out their lush lawns and planting edibles. I think I will when I get settled into my new house in FL. There are several disused raised beds in the back yard.
And the CA governor is just declared a state wide ‘stay at home’ order. Possibly too little, too late since NY state has gone from 500 to over 2000 Covid-19 new cases in about four days…it’s gone exponential in NY state due to the Elmer-Fudd slowness and incompetence of Gov. Mario Cuomo.
I have not read yet about how long China was in quarantine but it appears the economy is bouncing back. So I am hoping for the same thing here.
“This is all such circular madness, it’s hard to say when or how it ends.”
Mish, I’d like to read your attempt. You correctly held to “deflation” when many were screaming hyperinflation. And yet, asset prices have gone up and up and up, and while equities are down, treasuries are up and real estate (maybe) holding its value. It’s also true that excessive money printing (or CTRL-P in MMT) creates hyperinflation. So what are the scenarios that bring an end to this madness?
I suspect real estate will crash as formerly working buyers are no longer able to make payments.
Not if they are BofA customers.
Let the choosing of winners begin!
Bank Of America Offers Homeowners Relief: Its Mortgage Holders Can Now Pause Payments
I agree CC, already in just a one week jump we went to 9% unemployed and that is bigger than subprime trigger for the GFC was. I am buying a house now and close on the 6th, it is $257k and I am betting it crashes down by half or even more over the next couple years. Fortunately I have a good interest rate and I love the house so will be okay with spending the rest of my life there. My income cannot go down and as long as my mortgage is fixed it can’t go up. I will always be able to make the payment. However if bread goes to $200 per loaf, gas goes to $500 per gallon I will be in trouble. But then if that happens there will not be a government or civilization to force us to pay or evict us for squatting. It would be Mad Max time.
Its all good… Uber is still operating. I hear you can get 4k as a coronavirus guinea pig. They’ll probably only take you if you look healthy though. 6 million unemployed, increasingly desperate people won’t be a problem.
Gun stores very busy. Wonderful.
But are still not allowed to ship to customers.
Nor even let them pick guns up outside, to minimize points of possible contagion.
Go from 1/3 of the population working before the bioweapon to 1/4, primarily in govt! The unemployment “rate” measured by the bureau of labor and propaganda should print 0,or less than zero. So the US has 300 million,of that 60 million and change has a job!
Whose bio weapon? And how do you know?
I think it’s a bioweapon, but I think it escaped by accident. Part of the reason I think it’s engineered is the exaggerated response from China. They won’t even consider the possibility. Reminds me of baseball players accused of using steroids. The innocent ones ignore it. The guilty ones threaten to sue and give a press conference.