Jobless Claims Surge By Astounding 6.65 Million As Worst-Case Is Realized

17 thoughts on “Jobless Claims Surge By Astounding 6.65 Million As Worst-Case Is Realized”

1. We need to restart the economy soon. It is spiraling out of control. This is supposedly 50 jobless people for every identified case (not deaths, mind you) of the virus in the US.

   1. You can’t restart the economy when people’s lives are at risk. Period.

      1. I don’t like speaking in absolutes. So what in your mind needs to happen before the economy is started? The last person is cured, the virus is eradicated? This is a serious question, I would like to understand your viewpoint.

         1. read this: https://heisenbergreport.com/2020/03/28/bazooka-stimulus-buying-time-and-virus-utilitarians/

         2. We need to have two lab tests available to help us get a handle on the spread of the virus. The first, is a quick point-of-care test for active coronavirus infections so we can quickly identify new infections and quarantine people who contract it and are contagious. The second test we need is an antibody test (serology) to identify people who have had it, recovered, and have immunity to it.

            Once we can identify folks who have had it and are safe to return to work, we can start to open the economy safely by sending those folks back to work. Additionally, using the quick point of care test, we can do what we should have done from then get go, which is to rapidly identify new infections, perform contact tracing, and identify and isolate infectious persons to slow the spread.

            Unfortunately, access to testing is still a major problem in most of the US, despite the administration’s claims to the contrary. We need to rapidly develop and scale production of those two tests if we’re going to slow this thing down and get people back to work. Without those tests, the only viable strategy we have to combat the disease is to essentially isolate the entire population which is what’s causing a good deal of the economic impact.

            The administration should have used the 4-6 week head start that we had to develop quality tests and prevent us from being in this situation in the first place. However, instead of managing this like the health crisis that it is, they chose to treat it like a PR problem. Unfortunately, the virus appears to be immune to political spin.

         3. Would you sacrifice your Mother, you Father, your wife, your children for the economy? I certainly wouldn’t, I’d rather be hunting in the woods, bartering for seeds, to have my family and friends alive, than a bloated stock portfolio. I know people dying currently, I live in NY. To me this isn’t even a debate, when capitalism is more valued than life itself we’ve become no better than any totalitarian regime from the 20th century.

2. 10 million jobless claims, plus those who didnt file a claim, plus those self-employed that are basically idle, plus those small business owners…perhaps not too far from that 20% disoccupation figure.
   That said, the market doesnt seem to care much, but one can always argue that “it was priced in”.

3. When this economy restarts- it is going to look very different- I am optimistic, in the long term, that USA can reduce excessiveness ( much of which came from China and will be easy to decide that we do not need anymore), secure production of critical products/medical supplies, and improve workforce skills and therefore pay, healthcare, retirement benefits.

   However, right now is scary. State and local governments are furloughing workers; more companies are furloughing/ reducing employees/ reducing pay; public companies are cutting buybacks, dividends and planned capital expenditures. I am also reading that employers are starting to cut “matching” to retirement plans- which makes me think more people are starting to tune into their retirement plans and are or will soon be switching their allocation to “cash”.

   For example- Vail Resorts just announced that they deferred $85M, out of $121M planned, from 2020 capital budget (no new chair lifts), stopped dividends (for at least next 2 quarters), let go all seasonal employees, reduced by 5% -25% all corporate salaries. TTM, Vail distributed $300M in dividends and stock repurchases. This is not a one off!

   Also note that if public companies continue to award stock/ stock options without an offsetting stock buyback, the effect is quite dilutive.

   Lots to get re-tooled.

4. The economy may restart when we have effectively curbed the spread of the virus. A harder lockdown sooner rather than later would bring this about. We are extending and increasing our ‘social distancing’ incrementally as we learn through experience what methods of planning and what practices are failing. This will only lengthen the amount of time we have to remain locked down and in the end kill more people.

   Hubei province is an excellent example of how to ‘bend the curve’. It is true that the Chinese authority badly bungled the response in the way that authoritarian regimes who’s instinct is to repress often do. However, once it finally sunk in that this virus should be thought of and dealt with as an actual plague, the Chinese state swung into action to minimize the damage as only a modern and socially dominant state can. In Hubei whatever home you could shelter in for the duration you were locked down in. Exiting your house meant arrest and detention in less than nice conditions I’m sure. The government brought food around every few days. The stories I’m getting say that everyone was forced to spend two months of solid quarantine without leaving their homes to even walk outside. State media made sure everyone was too afraid to leave as well. Most people who got it died at home with their families.

   However, this did do most of the work of bringing the epidemic to a near dead stop. I’m sure it hasn’t been completely quashed. The government itself is terrified of the social consequences and there is plenty of unrest right now. But as far as taking measures to bring this to an end the Chinese government has to be given credit for taking care of matters IN China. I have multiple friends who live near but not in Guangzhou. They spent two months locked down except for truly essential services. They received a permit that would allow ONE person per household to leave to get food every two days. The economy came to a nearly true dead halt. But this worked.

   It is nearly impossible to imagine getting Americans and yes their police and military to abide or enforce anything like the measures taken in China. Without a much higher death toll, most Americans are completely unwilling to accept the loss of freedoms needed to quickly curb a pandemic. And we should be so wary.

   We can do a more complete lockdown to end this quicker with appropriate leadership. I doubt of course that it is there. We have also as a society become incredibly undisciplined and so getting people to follow effective leadership should it show up would be an even larger problem.

   We will through ‘smart’ (read cell phone) contact tracing, massive, repeated testing, and an expanded capacity to conduct commerce through better social distancing be able to begin to re-open society and thus the economy as the months drag on. But this is no small, quick but terrifying drop in the market. This is an epic, terrifying plunge into a depression that that we will emerge from based on our self-organizing ability and discipline as a society.

   I’d wander into a missive about who I expect to do well and who I think will get hit hardest, but this overly long already. Good luck and stay safe.

5. it is interesting to wonder what changes will stick, post-covid. For example – companies who spent the emergency capex on VPN & IT gear to enable remote workers, and are now “saddled” with a bunch of happy homeworkers and managers (like me, years ago) who realize “i still yack at people, i still hold staff meetings, i still have metrics, nothing really changed” – some of these companies will decide to just drink the koolaid and save the rent. Office space trends down. Media – Do CNBC et.al. really need to bring all those talking heads back in? Why? Retail – the apocalypse accelerates, the entire industry group could be removed from the S&P500. The space still gets used – my personal fav is indoor farming goes suburban as a new stable tenant. Kroger’s says: I want my entire produce supply chain to be 45 minutes long. Globalism predictions are above my pay grade, but I’d sure rather not be China, going forward.

   Fun note: AMC’s CEO’s prediction for the future is that nothing changes at all for the theater business. We’ve now conclusively, collectively, demonstrated that sitting home endlessly streaming … fundamentally sucks.

   1. I think it will be interesting to see what happens post-COVID. I think your initial belief about people working from home will be tested when people get tired of not interacting with other people (outside their families) in another month.

      My guess is some trends will accelerate–tend to agree with you about retail, while other changes will be more surprising.

6. It appears Florida is massively under reporting the true depth of our unemployment crisis. From the Orlando Sentinel”
   Right now, the state’s unemployment count is also artificially deflated, thanks to a system incapable of processing all the applications.

   Again, the numbers tell the story. During the third week of March – when national unemployment claims shattered records – the number of claims Florida reported was suspiciously low.

   Nationally, 3.3 million people filed claims (about 1% of the entire U.S. population).

   But in Florida, only 74,000 people filed claims (about 0.3% of the state’s population).

   Floridians make up 6% of the U.S. population and yet accounted for only 2% of the unemployment claims.

   That makes no mathematical sense for a state whose tourism- based economy is getting walloped way harder than most of America. Heck, the state’s own restaurant and lodging group estimated that 400,000 people had lost their jobs in that industry alone.

   Yet Massachusetts, a state a third our size, processed twice as many unemployment claims.

   DeSantis has since admitted the system is flawed and ordered improvements. But here’s the thing: We’ve known this system has been a cruel joke for nearly a decade – a $78 million online boondoggle designed to deny most people benefits.
   https://www.orlandosentinel.com/opinion/scott-maxwell-commentary/os-op-florida-hidden-coronavirus-unemployment-numbers-scott-maxwell-20200331-474tvnpx7bhd5humb4j7v5ulry-story.html?fbclid=IwAR22TMzFexaZCoBCJrE5yDgnriebYec8cWGNMBBFc0-LpimVMH7KX52d7rA

7. Normalizing the economy before addressing the virus would invite widespread lawlessness and economic collapse. Supply chains and hospital systems are fragile as it is. Imagine the economy when we have insufficient truck drivers and stores cannot stock vital supplies nationwide. Imagine the economy when hospitals close due to lack of supplies and staff. Imagine the economy when China seeing our utter economic devastation decide it is a great time to say… take Taiwan or cease shipments of critical supplies to the United States. Imagine the economy when even the people who operate power plants and water treatment facilities are too sick to work. We very well could see reduced economic activity until we have a vaccine. We may be able to do partial returns to normalcy with enhanced ppe to prevent a resumption of spreading but it could be months before we even can get those supplies.

8. Hold on a second, I’m like millions of other people, waiting to file, because I can’t get through to file, I have a callback scheduled for April 20, and all the slots before and after me are stacked like pancakes to the sky!

   I’m gonna eat and eat until I die, possibly trading my cow for magic beans

   1. In what State do you reside?

9. Some small businesses I know laid everyone off early, so their employees could file for UE benefits before the systems overloaded. Tough decision but in retrospect the right call.

10. The economic danger is that damage to SMEs may be unrecoverable and the job losses become permanent. Somehow banks or feds need to backstop the little guys. Tough problem, but don’t assume we have to play within the rules

    Make sure you can cover living expenses for 3-6 months.