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How Bad Will It Get? America’s Unemployment Crisis Set To Spiral, According To Some Estimates
Last week, America witnessed the largest spike in jobless claims in recorded history, as 3.28 million people filed for unemployment benefits amid mass layoffs associated with the lockdown measures put in place to contain the coronavirus.
Calling the figure a "record" understates the case.
That number recalibrated the y-axis - literally. We sailed into uncharted waters - and then right off the edge of the world. The figure was quadruple the old high mark.
Unfortunately, it's going to get wor
Some mumbling out there about going out as a political statement. A big middle finger to the coastal know-it-alls from the Trump base.
One not so enduring condition, lingering Ominously from the GFC, is the amount of vacancies, left behind from Mom & Pop businesses. In the tsunami wake of The Virus, it’s easy to ponder that few small businesses will go about business as usual, if they survive at all. Who will be able to take on the risky nature of economic instability, after the economic implosion?
If be surprised if the number is below 5 million and wouldn’t be surprised if it goes closer to 10 million for the week.
With the stimulus allowing small businesses to keep/bring employees on payroll, I expect the numbers to normalize (below 500k/wk).
The amount of time, effort, and brain damage required to apply for and be approved for a loan will result in many small business owners choosing to let go employees, instead.
If I were a Restaurant owner, and had the choice
1. to lay-off my staff and let them get gov’t. unemployment, or
2. Go deeper in debt with a new Government loan, and personally pay my employees to sit at home
Remember that many of these small businesses are forced to close to the public, and those that are not, are seeing drastic reduction in there businesses.
I think I’ll take choice no. 2
Here’s an interesting comparison – (from Bloomberg) “…in the 10 days between March 16 and March 25, some 1.55 million Canadians applied for jobless benefits, according to a senior government official with knowledge of the matter. That represents about 8% of the labor force.”
Last week’s US number is about 2% of the US labor force.