End of First Wave
Via Email, Challenger and Gray issued these statements.
“We are reaching the end of the first wave of layoffs. All the Americans immediately impacted by the shutdowns have been navigating the unemployment insurance system over the last five weeks. Now, we’ll see a lull before the next big wave of corporate layoffs hits,” said Andrew Challenger, SVP of global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc.
“A vicious cycle of falling employment begetting falling consumer spending has begun. The longer we stay quarantined, the higher the next spike in job loss will be. It’s a morbid race between flattening the COVID curve and capping the unemployment curve,” said Challenger.
The end of the first wave seems accurate, but perhaps a week early. I expect another 2 million or so to file next week.
For now it’s been furloughs. If business does not pick up to pre-crisis levels (and it won’t), the result will be permanent layoffs. Some things have changed forever.
Forever Changed
- More teleconferencing and fewer corporate lunches
- Less air travel, hotels, and car rentals at the personal and business level
- More work at home
- More do-it-yourself haircuts, nails, lawns, etc.
- Fewer car purchases
- Fewer home purchases
- Accelerated online shopping and more mall closures
What’s Next?
On March 23, I wrote Nothing is Working Now: What’s Next for America?
I noted 20 “What’s Next?” things.
Covid-19 Recession Will Be Deeper Than the Great Financial Crisis
The Covid-19 Recession Will Be Deeper Than the Great Financial Crisis. Do not expect a V-shaped recovery.
The knock on impacts of all of those means more bankruptcies and less employment..
Mish
I am gonna miss the suburban juicy mamas walking around the malls 🙂
I am not sure how this impacts the numbers posted. Florida has the wrost record for processing unemployment claims with 86% of them not processed. I went to a furniture store today and the sales person told me she has relatives that were laid off in early March who still have not gotten a check. Or even proof the state has processed their claim. Needless to say you cannot get through if you try to find out.
There is a lot of stuff that simply is not going according to law.
I bought a house April 6 in Florida, my insurance company wanted to know when I changed my address if I intended to register my car here within 30 days. I intend to yes, but the DMV is only doing simple things like renewals over the phone, new residents and complicated cases can’t be done over the phone. I am a 100% disabled vet with free permanent registration but I have to present proof in person in the DMV, I cannot. The lady said she thought the police would be understanding under the circumstances. Oh fine, I am sure that carries the weight of law.
The other night I checked the status of an Amazon order, I saw that within a few hours two new orders were placed on my cards at my Amazon account. Some guy with a small dick (size 9 shoes) ordered expensive sneakers to be delivered to a house in Menifee California. And another order to be delivered to a place in Deland FL for 2 dozen pairs of socks. (some people do not know socks can be washed I guess)
Try getting through to Amazon or your bank to contest such charges. One was on a credit card the other on my debit card.
Take my advice and go to any website you have an account and delet stored card information as well as your address, change your password tonight. Because getting a problem fixed is next to impossible. Make it the next thing you do. I never had a problem till this week. Suddenly I have accounts being drained and no way to stop it.
26.5 million?? And to think, I never believed that many folks even had viable jobs. Remember, they are all nonessential too!
Ha ha ha. Just knew this was going to happen!
Apr 22, 2020
Another Small Business Headache: Some Employees Are Asking To Be Laid Off Thanks To Higher Unemployment Benefits
Sarah Hansen
Bitter Taste For Coffee Shop Owner, As New $600 Jobless Benefit Drove Her To Close
April 21, 2020
Unintended consequences
Every change you make in a market…
If competing with $600 unemployment benefits is what drives her to close, the problem isn’t unemployment benefits, but rather other expenses. Primarily rent, most likely. Cut those in half or more, and outbidding the unemployment office becomes a lot easier for most businesses. Over time, as more businesses can’t afford them, that’s what will happen. And, as opposed to most other things Covid, lower rents are good things.
If she’s paying an employee $15 an hour for a 30 hour week, that is $450 a week. And that requires the employee to show up and do actual labor.
If the government will pay her employee $600 a week (or more) to stay home and DO NOTHING – how the actual FUCK is she supposed to compete with that?
She would have to make the manual labor she requires done more attractive than laying in bed eating ice cream and watching Netflix.
And your assertion is that it was the amount of her RENT that caused her to have to close….
Please tell me that was sarcasm. Please.
Since she’s paying less than 24K per year, keeping employees will be tough. The problem is that poverty wages are necessary to compete.
$23k a year is pretty fucking awesome for slinging coffee 30 hours a week.
But hey – fuck it… If we are going to do that, let’s just print money and pay everyone $40k a year to do nothing and see how that works.
If you measure the wages against gold, compensation for that job should be around 56K. Also M2 has increased 2 and half times and the monetary base by almost 5 times since 2004. So yes they are poverty wages.
Even higher if you measure against a historic housing price average of 3.5x annual income.
Claims dropped 3.5 million in one week. You could spin that as the greatest economic surge in history.
Also, the DJI has NEVER been in the red on a day when initial jobless claims topped 3 million! 5 consecutive times now! How’s THAT for good economic news!
Deaths per million in New York have reached 1060. That’s more one death per 1000 people. Probably a lot higher than that in NYC.
Those who want to lock down should be free to do so and those wishing to go about their lives should be free to do so as well. According to Mish if you test positive and are coughing sweating with high fever and have shortness of breath you should not have the freedom to spread the virus as you please
I’m not sure I understand the point.
You didn’t @ me, but you quoted me so I am assuming your comment was directed to me.
As ZH noted this morning:
“So far we have lost 545 jobs for each CV death in the US. “
Yes that will change over time depending on the rise in the number of deaths and/or jobs lost – however at what point is it okay? Is it 20 jobs per death? 200:1? 1:1? What is the acceptable ratio?
Furthermore, that doesn’t include all those who have lost other things in the lockdown…
How many have lost or will lose their business? How many have lost or will lose their home, their car, their family? How many individuals will have to declare bankruptcy? How many may die sooner because of an undiagnosed cancer or some other disease because they couldn’t keep their appointments for testing? How many will succumb to depression and take their own lives – or someone else’s? How many will suffer untold losses, die, or be sick or injured in the future due to the unintended consequences of continued lockdown?
Don’t get me wrong – I believe the virus is real. It is not a hoax. And as I said before, I was a “bend the curve” guy about six weeks ago. However, the rhetorical questions above are meant to point out just a few of the (probably hundreds or thousands of) unseen things that I don’t believe were considered when the decisions were made. Yet the reality is that these things are just as real as the virus to the people who are – or will be – affected.
And I believe that because we cannot possibly know all of these things, our most prudent course of action should have been (and still should be) for government to warn and recommend, then get out of the way and let people decide for themselves.
Those who want to lock down should be free to do so and those wishing to go about their lives should be free to do so as well.
South Dakota is a good example of what you described in your last sentence. Of course, the leftist media screeched about cluster of cases they had in a meat packing plant to paint the approach as a failure. (Of course, they didn’t bother to mention the plant would have also been open in any other state because it’s an essential facility.)
It’s hard for me to get worked up about personal financial loss when we already knew the endgame of our giant ponzi scheme was total collapse. Widespread job losses, bankruptcy, suicides, and much more were already baked into the cake, so we’re talking about a matter of timing rather than eventual outcome.
We’re still flying blind with this virus, so it is also entirely possible that reopening early could lead to more death and economic destruction too. Aside from that, I find it hard to believe that the US would have FAR more cases than any other country, so there is definite underreporting going on elsewhere in the world, particularly in China. We still don’t know the severity of the virus as it exists this moment, let alone in the coming months.
You asked the question. In your mind what is the appropriate job to death ratio?
I don’t need an answer because I don’t believe I have the power to decide for everyone else.
The question was directed at those who DO believe they have the power.
There are a lot of people in younger generations mis-targeting ire from corruption and plutocracy toward capitalism. They don’t understand that capitalism is simply a system of trade. Similarly older generations often mis-target ire toward plutocratic government mismanagement toward belief that less government is always the best answer.
Being a capitalist and a socialist are not mutually exclusive. One can believe in the necessity of a well regulated market which curbs the excesses of “profit above all else” while also creating a fair playing field AND believe that it is a good choice for government budgets to invest heavily into social services.
Someone with this perspective finds the idea that we have to choose between a healthy economy and a healthy populace in the midst of a pandemic a false dichotomy.
American productivity is absolutely incredible. We can feed our populace from farm, to truck, to packaging, and to stores/packaging with less than 15% of GDP (about 8-10% of available/needed labor).
Business can adapt to darn near any universal challenge as long as one business doesn’t have a regulatory leg up on a competitor, and entrepreneur ingenuity will find a way to be productive within those limits.
Between unemployment insurance and stimulii (past and planned) we are creating a space for Americans to safely catch up intellectually and emotionally to a new status quo. New jobs will be created, new business processes which ensure safety and hire people eager to earn more than their government checks while also feeling that they aren’t being sacrificed to the gods of “uncaring profit”.
“Open it up” isn’t a solution calling for the future. It’s a rally cry of resistance to change. It’s an expression that one thinks that we can’t adapt, be effective, and be creative.
Allow America to grow and stretch into excellence with the new foundation we find ourselves in. Allow automation and technology to present new options. Allow consumer interest to dance with sellers in exploration of which products and services matter to them in the new paradigm. Allow the new economy to grow.
Yes… high unemployment pay does reduce the likelihood that people will choose to get a job. Thus I strongly propose we replace unemployment entirely with UBI. It would create the SAME necessary safety net for people who are unemployed we already have, while removing the disincentive to work that having to choose “free money” vs earned money would create.
Lets take two years exploring new budgetary priorities and seeing whether Americans are truly fundamentally lazy without desperate need driving them to work.
Maybe we will choose to shift back to the old unemployment insurance paradigm where help between jobs was something one earns only by staying at a job long enough.
Or maybe we will find that when presented with the freedom to do what they want, most will choose where to work primarily due to the purpose or work culture, and the most toxic work environments will either transform or have to pay a hell of a lot more. Maybe tax receipts will climb as the speed of cash increases when money is spent into the light hands of non-investors before quickly cycling through many service/product provider’s hands on its way to being saved and invested more slowly and carefully by investors.
Most governors are already exploring how to “open up” in a controlled manner where nonessential retail businesses like mine (shop has been closed for over 30 days now) can provide our products and services legally while also maintaining social distancing. We went from thousands a week in retail sales to zero in 7 days. 14 days later we are crossing a thousand a week in online sales, delivery and services. We are building our online sales and service processes very very quickly and we believe that in 2 weeks we’ll have gotten halfway to where we were at the start. We hope in a couple months to be there and further.
Trust in us to be creative. Trust in us to overcome challenges. We aren’t stuck, because we can still think and create, even as we deal with a global pandemic which needs us to use the last resort solution of extreme social distancing to lower the rate of doubling of an extreme unknown.
We can find out how to maintain a rate of doubling for the infection which doesn’t involve our medical systems getting overwhelmed, and build a healthy and powerful economy at the same time. Just give us a chance to figure out how.
and the stock market is up!! woohoo!! scratches head
The stock market is the obvious sign that the financial powers that be are laughing themselves silly at the way the Fed always dumps trillions into their laps while tens of millions are struggling to make ends meet.
I think there is more than enough evidence that crony capitalism simply means socialism for the wealthiest and austerity for everyone else who gets to eventually pay for it through taxes or currency debasement. How that is functionally (not technically) different from the other boogeyman -ISMS is not all that apparent.
The difference is death rate is directly proportional to the level of government control over the lives and finances of its citizens. In general, western democracies are the “least-worst”. (Note I didn’t say perfect, or ideal or even good.)
Ridiculous. South Korea and Taiwan are doing much better than Western democracies.
The corona virus is great for politicians and central banks as it gives them an excuse for what was already coming.
Bingo!
So Dow 500K?
“Sounds inflationary”— to me, it sounds like quite deflationary.
I believe that was sarcasm
“Sounds inflationary” is Tony Bennett’s shtick…
Pretty damn funny too!
Poe’s Law — any sarcastic comment no matter how outrageous will be interpreted as serious without a visual indicator of sarcasm.
I see a bright future in agriculture robotics.
They exempted cheap agricultural immigrant labor so there will be no driving force pushing towards robots in agriculture.
Mish, V – shaped recovery…fuggettaboutit! There won’t be a U – shaped one either. Check out this https://seekingalpha.com/article/4339436-impossible-road-to-herd-immunity?utm_source=smartnews.com&utm_medium=referral
Without a cure or vaccine there will be no recovery.
This should help the Nike swoosh –
(Bloomberg) —
Major U.S. credit-card issuers are starting to lower customer spending limits as the coronavirus pandemic leaves millions of Americans jobless and struggling to keep up on loans.
Spot on. People can now request weekly free credit reports at the annual credit report site. I checked mine and there were a large number of administrative inquiries for my many open but inactive and zero-balance accounts acquired to play the points and miles sign-up bonus game.
I’m guessing the official unemployment rate is around 22% based on this data.
That does not include self-employed persons, nor does it include reduced hours.
I personally prefer income tax revenue to determine the unemployment rate in terms of hours worked. One person working 40 hours with another unemployed is the same thing as 2 people working 20 hours, only the second example counts as “0” people unemployed.
It’s not exact, but tax revenue smooths out unemployment numbers and paints a more accurate picture.
“Now, we’ll see a lull before the next big wave of corporate layoffs hits,”
…
Aka the better pay / benefit jobs. Should do wonders for demand.
Sounds inflationary