Yelp reports Increased Consumer Interest in May correlates with more Covid outbreaks and closures in June and July.
Consumer Interest vs Outbreaks
Business Closures Fluctuate Across the Nation
- There were 140,000 total businesses closures on Yelp from March 1 to June 15. This increased to more than 147,000 total business closures on June 29 and then dropped again to just more than 132,500 total business closures as of July 10.
- In April, there were more than 175,000 business closures indicating that only 24% of businesses that were closed in April have reopened.
- Even as total closures fall, permanent closures increase with 72,842 businesses permanently closed, out of the 132,580 total closed businesses, an increase of 15,742 permanent closures since June 15.
- This also means that the percentage of permanent to temporary business closures is rising, with permanent closures now accounting for 55% of all closed businesses since March 1, an increase of 14% from June when we reported 41% of closures as permanent.
- Overall, permanent closures have steadily increased since the peak of the pandemic with minor spikes in March, followed by May and June.
Total Businesses Closures
States with the largest populations have the most closures.
Total Business Closures Per 1,000
On a metro level, Las Vegas, NV, is suffering from the highest rate of permanently closed businesses with 861 businesses permanently closed, as the city reacts to a decrease in tourism. Meanwhile, Los Angeles, CA, has the most closures with 11,342 total temporary and permanent business closures.
Restaurants Struggle
Yelp has many additional charts.
Inquiring minds may wish to investigate.
Six Related Articles
- Banks Double Loan Loss Reserves ‘Everybody Is Struggling’
- Housing Starts and Permits Improve But Not Enough
- Cass Transportation Index “Not Good By Any Measure”
- China’s Unexpectedly Strong Growth Isn’t What it Seems
- All Continued Unemployment Claims Top 32 Million Again
- Work-From-Home Will Reduce Driving by 270 Billion Miles Per Year
Conclusion
Permanent closures will continue to rise. Many small businesses already on the ropes, will not survive the reopening reversal.
Don’t confuse the stock market with the real economy.
This is a deflationary event.
For discussion, please see Unprecedented Recession Synchronization and What it Means.
Mish
“Banks Double Loan Loss Reserves ‘Everybody Is Struggling’” 19July, and “More Than Half of Business Closures are Permanent” + Monetary debt, individual or governmental, is the very worst self-induced curse upon ‘civilized’ man. + I’m not “struggling,” period. I’ve had ZERO debt since Feb2003. I retired at the age of 59 in 2006. I use a credit card for the Cash Back benefit which goes to my chosen charity. I pay my credit card bill in Full upon receipt. + I warned whomever I could of what’s before us, Social / Economic Chaos, for the past 10 years: eliminate ALL debt, cash out of all ‘investments,’ hold cash, shrink lifestyle to a minimum, move to a very small town of choice with basic services (grocery, fuel, garage, gun shop). I told all it was impossible to know what would cause the Crash but it was upon us and unstoppable, with the Economic Crash, here / Globally, making the Depression resemble a casual time off from work. I told the ignorant, which is most all, that it was the end of WWII that ended the Depression, knowing no one understood the implication. So, with an American Black man killed by a White cop, and a virus from China now Global, our trip to a living Hell on Earth has just begun. The End is indeed near, for those of us who believe such.
That’s great Tex. I beat you though, I retired in my 40s after about a decade of hard work, saving 500k USD, and no debt. But I had rich parents to fall back on (though I never asked them for money while I worked, but they were a fall-back option; I now only get a modest monthly allowance out of them, given their huge net worth, they are in the 1%). Very few savers however in the States.
Ray,
Money long ago ceased meaning anything to me. I’m on the cusp of obeying Jesus Christ’s words found in Mt:19:21.
To your reply. You may find the following interesting reads:
“Coronavirus reveals financial irresponsibility of Americans” [and the World – Tex]
~
THE FATE OF EMPIRES (1976, Sir John Glubb)
It’s an easy 26 pages read. Read the Summary on p. 26. America’s End is here.
All governments are run by liars and nothing they say should be believed. I. F. “Izzy” Stone, 1907-1989
Tex +++
How did we come to this? Here’s how:
“More Than Half of Business Closures are Permanent”
…
I’m kind of disappointed.
Neither Mish or the preceding 39 comments … nary a word on DEBT.
These businesses going out will walk away from hundreds of $billions ($trillion+?) in debt. Many highly profitable businesses – with good cash flow in normal times – have substantial short & long term debt.
As the defaults pile up —-> credit tightens —-> leading to more businesses (and their debts) in trouble.
We’re just getting started.
Didn’t the PPP try to load another few hundred billion of federally guaranteed loans on small business. The bankers own both sides of the aisle.
Looks to me like COVID killed off lots of zombie businesses, particularly in retail, that ordinarily would have taken five or ten years to fail.
It also killed off enormous amounts of money wasted on pointless commutes on crappy transit systems to overpriced offices surrounded by overpriced shops.
Even conservative companies like Siemens see the benefits of telecommuting and remote work on productivity and costs; the old model of a handful of cities having all the high end jobs and rentiers gaining rentiers profits by simple dint of owning real estate in those markets is lost and gone forever.
Americans also see that a large part of our everyday spending was for crap we don’t miss and will likely never return to spending money on.
There may also be a downside to working from home – especially for those employed in the larger cities. Companies are already starting to lower the salaries of white collar workers that no longer need to commute to the office. It is a win, win for corporations (lower real estate costs & salaries) and lose, lose for employees and small businesses located close to those businesses. The rich will get richer while the other 90%s will experience a continued fall in their standard of living. Not quite the American dream.
I see unemployment claims are on the rise again this morning. Not sure an additional $1T will be enough at this point. Gonna need a bigger wheelbarrow.
I was in 3 retaurants in Kansas over the weekend at locations that are normally busy at the times I went. 2 were dead, 1 was at around 1/4. I dont see them lasting. A couple of the outdoor malls are looking a bit ominous here lately. Walmart is busy everyday at all hours as is home depot. I used to enjoy time off during the weekdays to avoid crowds now there’s days I can’t differentiate between a weekday and weekend.
Hotel pernoctations (tourism) Spain, and still quiet into July by various accounts
Greece tourism also dead now. I went to an excellent seafood cafe (30 Euro a person for snacks but worth it) and it was one-fourth full, the beaches nearly empty, all local people, no foreigners. Maybe that explains the fresh seafood, since the Mediterranean is ordinarily over-fished and a lot of seafood seems, in normal times, to taste like it’s frozen and caught elsewhere. Wouldn’t surprise me.
Considering that the country is awash in store square-footage way above any other country and people still buy the ruse that “you too can own your own business!!” and the friends and family who lose their investment when over 50% of small businesses fail and all the wasted money on store construction and shelving and start-up costs and never-ending advertising and the libertarian stance that the market should determine whether a business should succeed or not, I really dont see any bad news in this article’s title.
Because this is a market…
All new apartment builds here in northern CA always seem to have retail space on the 1st floor and apartments/condo’s above.
Just want to say we all have President Trump to blame for this shit show. If he had really taken this virus seriously at the outset and followed the best scientific advice we would now be in a lot better shape. China and most of Europe is opening up again while the good old US of A is still plumbing the depths of this epidemic. I know the covidiots will claim it is not Trump’s fault but I have a little secret for you. It absolutely is the fault of our federal government and those moronic, sycophant governors who refuse to accept scientific reality. Here we are with what we like to think is the best health care system in the world dealing with a third world style response. Time to throw Trump, Mad Mitch and Graham out in November. Sad to say the best minds we can throw at this problem are Trump, Kudlow, Navarro and a bunch of clueless governors.
Remember in January and February when the MSM, Fauci, et al. were saying not to worry? Trump had his advisors saying not to worry. I truly believe that was to let the virus get well established. Then the equivocations started. No Masks, Masks…
Two weeks to stop the spread. Give us another month so that hospitals can prepare for another wave. The New Normal ( which is psychotically abnormal. Can’t go on). Then the goal became suppression of the virus for as long as it takes to get a vaccine. When cases rise, we hear that a vaccine is around the corner. When cases decline, we hear very little. Fauci also stated that the vaccine will be a tool, but not the end all. We are being led toward a Police State with permanent travel restrictions, movement tracking and cashless society.
Pandemic remediation is also being managed so as to get Biden elected. Since Trump has supported herd immunity, all of the news coverage has been directed at creating as much fear and panic over C19 as possible. If Trump had supported harsh lockdown, you can bet your ass that news coverage would have been devoted to creating an economic panic. This effort is to get Biden’s to-be-announced running mate into the driver’s seat. Biden will be declared incompetent within 6 months of the elections. I suspect someone to the radical left will be selected, perhaps Elizabeth Warren.
Bankruptcy is a business strategy. Ironic it would happen under the bankruptcy king.
The stock market has an endless amount of liquidity thanks to the FED. It is the only game in town. As Mish points out, it has nothing to do with the real economy.
once the businesses fail and the rents are cheap, the rich will cash out their liquid stock market position and buy businesses on main street. mom and pop bakery will be owned by some rich guy, or replaced with some rich-guy impression of the mom and pop bakery that stood before. nice racket to prop up the paper industry to take advantage of the pain on main street.
who cares??? The stock market is booming!!
Always look on the positive side. It means there’s 40+% that will remain open! Also think about the opportunity for explosive growth from here on out.
Business=Cash flow
Stop the flow, and there is no business
Everything else in the economy is in some way a derivative of cash flowing somewhere
How many small businesses have slashed prices? Saved from their previous good years? Brought in outside investors? How many have innovated new ways of doing business?
Creative destruction is underway.
No, this is not creative. This is just good old fashioned destruction with little redeeming value. Like a fire, flood or hurricane.
Obviously your kitchens will need to move to the Cloud.
If there’s Cloud Computing, why can’t there be Cloud Cooking?
I mean Travis, that b**tard from Uber is doing it, so anybody can do it right?
I’m all for it as long as they can serve up a decent byte…
Cloud eating will assist in weight loss!
Wait loss too?
I was at a fairly large BBQ restaurant in Orlando on Saturday to pick up take out for a group of 8. The restaurant was open for sit-down meals. Only about 6 people inside at the dinner hour. I asked the cashier how was business going. She said slow….real slow. Normally this is a very popular restaurant.
I don’t know how businesses (either big or small) can continue if they can’t operate at a break-even point or above. No doubt there will be an increasing number of firms that will not be able to weather the storm.
Well now we know how “Every restaurant is Taco Bell” from Demolition Man.
At least we know from Idiocracy that a crude version of Fuddruckers will still be around too.
As long as I can get my BIG ASS FRIES, I’ll find a way to manage.
Demolition Man “Taco Bell” was the cafeteria at Raytheon El Segundo, I worked there. At that time it was Hughes Aircraft, and the “street” with the valet parking was nothing more than a short sidewalk with a tight camera angle. Cars probably moved 10 feet in reality. You can google map the satellite view and zoom in on it.
link to google.com,-118.3891503,63m/data=!3m1!1e3
BTW: Fuddruckers didn’t make it, they are gone as of a couple weeks ago 🙁
I know that area well. I’ve done a lot of work for Northrup Grumman at their Douglas campus right at Imperial. Not sure if you still get over that way but Frijoles Mexican Restaurant on 120th and Aviation is awesome!
Haven’t been there lately. Did you spend any time at the Wild Goose? Best $4 steak for lunch ever 🙂 🙂 I think they tore that place down.
Never got to eat there….
Talk about wishing on a star Mish; look at the graphs I culled from The Daily Shot Editor today:
Note the top charts are all optimistic but the bottom charts say that optimism is going to get hurled into the abyss before the year ends.
People are not in this picture, staffing is abysmal, profits even worse in spite of charging higher prices. Reality has to hit home soon. When it does all those other charts will reflect that reality. When they talk about the new normal this is what it really is, at least 30 million collecting unemployment and another 20 million without even that income. 50 million either with no income or on incomes that are going to stop more or less all at once because the UI binge started all within a matter of weeks, so it will also end within a matter of weeks.
Biden really wants to win this election?
Good luck to whomever does, they’ll need it by the ton.
This one is his last chance.
The charts are most likely monthly, so you are seeing change from last month. In other words when they reach neutral what it would mean is just that they are not getting more negative, but have settled with the negative sentiment built up previously. So optimistic not so much probably.
for example has an explanation with it.
Yes, on the charts I posted they look to be all monthly indexes, and the only one that is really opinion based is the purchasing managers index at the very top, that is of course very subjective since it is a poll basically of purchasing managers and their relative optimism or pessimism about the future based upon current purchasing activity. They make up a very narrow niche of the economic pie, so why such emphasis gets placed on them is questionable. They look forward to make a guess about purchasing goods and services needed for their company’s future production based on performance in the recent past, but in spite of being an informed guess it is still just a guess. And the wider economy has hundreds of millions of other human variables that may be far more pessimistic.
The rest of the charts are more data dependent except for business confidence, that also is an informed guess.
The real hard figures that count for the future are the employment and profit indexes at the bottom. Because in the last several months something like prices charged can be manipulated to look like a sharp V shape, but only temporarily, as profits crater on top of those higher prices macroeconomic demand must fall no matter how much cash they inject into the economy. As unemployment not only grows but becomes structural and entrenched what we will have is a depression not a momentary gasping recession. People out of work ALWAYS means lower demand, lower production, lower profits. And we are now caught in a downward spiral that we cannot yet begin to see the bottom of except to say it is going to be far worse and far longer before we hit bottom than anyone has previously predicted. The politicians could have arrested that spiral with bigger inflows of stimulus on top of the already poorly distributed flows up till now, and the democrats did take a shot at it by passing a $3.4 trillion plan, but that was and remains blocked by the GOP which simply does not care what happens to individuals.
I personally do not like the proposed democratic stimulus, it is far FAR too generous to the unemployed, making sure that are paid $2,600 per month on top of what other UI income they may have. And even in the reddest state where UI is low like in Florida at $257 per week that amounts to a middle class income for most unemployed workers and well more than they were making when working. It is also more than I recieve in disabled veteran compensation meaning we are even lower in economic standing than unemployed people. In the meanwhile my fixed income has to cope with the shortages and higher prices with no supports or assistance at all. And the higher prices are here. It will get worse. With their plan I will not survive this year financially, I am already stressed to the point that the new house and move across country is in danger of failing this summer, barring a miracle I will have to walk away from my new house somewhere around the election but certainly before this year is over.
What they needed to do and still do is a temporary UBI where all adults are given a tax exempt $2,000 per month rather than very uneven and poorly distributed extra UI benefit. States with very stressed budgets are denying UI claims even though every granted UI claim means an extra $600 per week enters that state’s economy. So, 100,000 people granted UI would mean a federal stimulus to that state of $60 million they will not get by denying those claims. There are at least that many people in Florida alone that have been arbitrarily denied and who are appealing their decisions.
I think if forensic accountants ever can or do go back and try to trace where all the trillions distributed so far have gone to we will see that something like 2/3 of that money ended up on Wall Street and in the pockets of shareholders who are the very last to need it. We are talking about two things here when it comes to stimulus, one is need, the other is arresting that downward spiral in the macroeconomy and the GOP understands neither.
My conclusion is that we are on track to see the economy fall into a deep and lasting depression we may never fully recover from and that along the way tens of millions of people like me will be not just damaged economically but destroyed.
I do believe they will finally one day years from now see a future so bleak that they will attempt to slow the fall with socialism but it will be too little too late and the wrong prescription anyway. They will attempt to level out incomes when what they have needed to do all along is level out assets. They set up a system mostly via the Fed that concentrated assets in too few hands, we now have an economy that 10% of Americans own 85% of all assets and capture MORE than 100% of all new national income and it has been that way since Bush was in office. In order for them to take more than 100% of all new income they have to capture 100% plus a chunk that used to go to the other 90% of us. Meaning literally the rich are getting richer and the rest poorer. Being in the 90% means riding the down escalator to poverty and the 10% riding the up escalator to wealth, and it is baked in, social mobility is as low as it has ever been. The so called solution will just make that worse.
Socialism for the rich vs. socialism for the poor, and most people are wandering around trying to make it work while steadily losing. The system “works” to a degree, the US is a wealthy nation ahead of many in europe say and even for the lower tiers, but the format is based on a lot of “unnecessary” activity and associated debt and values. If that system fails then really I don’t know, anyone can take their pick of better solution. You know in the great depression farmers bought their property back for a dollar – dollar auctions (or penny auctions is the more correct term maybe)
this kind of change in value brings out all kind of improvisation in society. In europe there were various anti-forclosure movements during gfc for example, some sincere some politicised. It is just disturbing to watch so many people being thrown around and hurt for no good reason. Sometimes that is what it takes to mobilise society I suppose, and if gfc is anything to go by all that results are patches and half measures. I’m used to poorer countries and their individual value system, so when I look at what the west is, I see a lot of privilege and waste everywere – not for me to judge against but maybe the loss of touch with fundamentals will really upset society if it becomes too stressed. I hope you get to keep your house also Herkie, I know a lot of people, of families and youth who could never afford one and so on, but I would not want others to lose the home they do have because of that.
You know I’m watching Spain, there a perfect storm is brewing also, and you are right that we haven’t but seen the tip of the depression to come. Take care, always appreciate reading your comments, not always agree but always see a lot of reason in what you say.
Anda, I think you are very articulate and thank you for the compliment. Your values remind me a lot of my mother and grandparents. My great grandmother was born into wealth as her father had built up a smal mercantile empire in the Seattle region in the 1800’s, and my grandfather was raised in luxury, but they lost it all quite literally overnight when he was a teen, he was scared for life by that. When he died we found envelopes with small amounts of cash hidden around his house, several, and we are sure that there was quite a lot more we did not find, possibly in coffee cans buried in his yard or under floorboards.
I do not think inequality is of itself evil but, I do believe that when the talents and hard work of millions is under compensated in a structred economy that is tilted in the favor of a very few who enjoy massive levels of access and similar levels of unequal justice then that system IS evil and people have to stand up to it, change it, break it if that is all it will respond to. Socialism is not viable, it can be made to work for a while but always fails and always will, usually when it does it takes most of what is good in a culture with it. You end up with brutal regimes and no justice at all.
I think the west, particularly the US, has reach a point where the wealty know their time is almost up and a socialist wave will wash them away, and because they know they are staving that off as long as they can with bribery and quasi socialist programs to temporarily blunt the socialist impulse. This gives them time to feather their nests, loot the government and treasury and convert this to portable assets, off shore what they can, they have no loyalty to the US, their loyalty is to themselves and mammon, that is why Trump is so popular with them, he is the ultimate self centered money worshiping pirate with zero compassion or empathy. A documented fact so long as you do not suffer from DTS.
I would not worry so much, and not for my own financial issues either, except this time the sweep of history will very likely bring death and misery, possibly even extinction with this turning. History has great wide swaths of societies rising and cultures falling, and Dark Ages overtaking us, to later revive in renaissance, sometimes after many centuries. This time though the pressures of billions of people and nations possessing high technology mean that humans could not simply go into a dark age but end all together. It almost feels inevitable. And even if that dire possibility does not come true I shudder to think of all the reinventing the wheel we will have to do to emerge from the dark. I will be gone, but, what was all the work and struggle for if a few narcissistic playboys can bring our entire culture to this darkness with their rapacious greed? It makes me tired to think of the effort and work and self imposed ethics that prevented me from being “successful” only to find out late in life I never actually had a chance in the first place. The banquet was laid for others and not the likes of me.
I was wealthy once you know. Or, I should say a wealthy person took a fancy to me so that I lived that kind of life people so often dream of. That wealth by now is well into the billions, his father had been lucky enough to inherit a lot of money, and was a bank president in the depression buying up foreclosed property at pennies on the dollar, farms, mines, ranch land, owned some 22,000 acres in and around his state’s capital. Bought depressed stock at firesale prices, but, to this man I was an object, and money was a tool/weapon if that was what was needed to get his way. After three years I left. He is dead now, but I am sure he would have felt a real kinship with Donald Trump, and people like Jeffery Epstein.
One day the price of tulips will be discovered.
Fomo
You know, you can eat tulip bulbs. That’s what the Dutch ended up doing.