Depression 2020

It Is Much Worse Than You Are Being Told

For a long time I warned that our economic bubble would burst and that we would plunge into a nightmarish economic collapse.  Now it has happened, and it turns out that fear of COVID-19 was the “black swan event” that triggered the collapse.  The ironic thing is that COVID-19 is not even close to the worst thing that is going to happen to us.  But it was more than enough to topple our incredibly fragile economic system, and now tens of millions of Americans are deeply suffering.  On Friday, the April jobs report was released, and it was the worst jobs report in U.S. history by a very, very wide margin.  According to the official numbers, 20.5 million Americans lost their jobs during the month, and the unemployment rate shot up to 14.7 percent.  During the last recession, the unemployment rate peaked at about 10 percent, and we have already left that number in the dust.  The figures that we are seeing now are truly, truly horrifying, and what is even more frightening is that they aren’t even that accurate.

But don’t take my word for it.

On Friday, the U.S. Labor Department publicly admitted that the true unemployment rate in April was closer to 20 percent…

Millions of U.S. residents were counted as employed in April despite having no job, suggesting April’s true unemployment rate was closer to 20%, much higher than the official 14.7% reported, the Labor Department said Friday.

The jobless rate should have included people on temporary unpaid leave, furloughed because of the coronavirus pandemic, the government said.

I applaud the Labor Department for trying to be honest.  In the report, they openly admitted that an “additional 7.5 million workers” should have been classified as unemployed…

But responses to the survey by which the data was collected show 11.5 million people were categorized as employed but absent from work because of vacation, parental leave or other reasons, but including 8.1 million absent for “unspecified” reasons, a group that usually numbers about 620,000.

“One assumption might be that these additional 7.5 million workers …should have been classified as unemployed on temporary layoff,” a note attached to the government’s jobs report Friday said.

If those workers had been correctly classified, the official unemployment rate would have been about 19.5 percent, and that would have put us solidly in Great Depression territory.

But others have looked at the numbers and calculated that the true rate of unemployment should be even higher than that.

For example, Standard Chartered has calculated that the true rate of unemployment could be as high as 27.5 percent…

While it is true that what the BLS reported that the April unemployment rate (UR) was less than expected (14.7% versus consensus of 16.0%) and the drop in payroll employment of 20.5 million was also less than the 22.0 million expected, Standard Chartered bank has calculated that adjustments to the headline unemployment rate push the effective number of unemployed to 42 million and the effective UR rate to 25.5%, higher even than the U-6 underemployment rate of 22.8%. Worse, if one treats underemployed in line with the U-6 methodology, the true April unemployment number would rise to an mindblowing 27.5%.

So how did Standard Chartered arrive at those numbers?  The following is how Zero Hedge explained it…

How does one get these numbers? As the bank’s chief FX strategist Steve Englander explains, start with the 23.1 million unemployed as published by BLS. To this add 8.1mn people who have dropped out of the labor force since February (previously the labor force had been growing steadily, so these are likely unemployed).

Add back 7.5MM workers classified as ‘employed but not at work for other reasons’ – BLS states that these workers are likely misclassified as employed, when they are in fact unemployed. Involuntary part-time work for economic reasons has gone up by 6.6MM and we treat these as half-unemployed (i.e., a contribution of 3.3MM).

This totals almost 42 Million effectively unemployed.

And Standard Chartered is not the only one that has come up with such a high figure.

In fact, John Williams of shadowstats.com says that if honest numbers were being used that the U.S. unemployment rate would now be an eye-popping 35.4 percent.

Wow.

Of course everyone admits that things are really, really bad and that the numbers for next month are likely to be even worse.

If you can believe it, even White House economic adviser Kevin Hassett is admitting that the official unemployment rate is likely to surge above 20 percent in “May or June”…

White House economic adviser Kevin Hassett believes the unemployment rate could rise above 20% and the worst job losses would come in “May or June” because of the ongoing coronavirus pandemic.

When asked Sunday what the “bottom” of the country’s unemployment pain would be, Hassett, who advises the Trump administration on economic policy and is the former chair of the Council of Economic Advisers, told CBS’s “Face the Nation,” “to get unemployment rates like the ones that we’re about to see … which I think will climb up toward 20% by next month, you have to really go back to the Great Depression to see that.”

And even once this pandemic fades, many of those jobs won’t be coming back.

Initially, many employers had anticipated that they would be bringing all of their employees back following a short, severe crisis.  But at this point reality is beginning to set in for many of them.

For example, a restaurant owner in Kentucky named Britney Ruby Miller has had to lower her expectations as this pandemic has dragged on…

In late March, Britney Ruby Miller, co-owner of a small chain of steakhouse restaurants, confidently proclaimed that once the viral outbreak had subsided, her company planned to recall all its laid-off workers.

Now? Miller would be thrilled to restore, by year’s end, three-quarters of the roughly 600 workers her company had to let go.

Yes, the state of Kentucky is starting to “reopen for business”, but for now her restaurants will “be limited to 33% of capacity” and there will be all sorts of other new expenses that Miller will be forced to deal with…

Yet business won’t be returning to what it was before. In Kentucky, the restaurants will be limited to 33% of capacity. They are putting six feet between tables in all their restaurants, thereby limiting seating. Miller estimates that the company’s revenue will plunge by half to three-quarters this year.

And expenses are rising because the company must buy face masks and other equipment for the workers it does recall and restock its food, drink, and equipment supplies.

There are very, very few restaurants that can be profitable under such circumstances.

Unless the state of Kentucky lifts those ridiculous restrictions, Miller may soon lose all of her restaurants and all of her employees may soon be permanently out of jobs.

Of course more layoff announcements just keep rolling in from all over America with each passing day.  The following examples come from the Wall Street Journal…

This past week, General Electric Co., Uber Technologies Inc. UBER 6.01% and Airbnb Inc. said they would lay off thousands of workers. MGM Resorts International MGM 4.42% warned that some of the 63,000 employees it has furloughed may be let go permanently starting in August. Aerospace supplier Raytheon Technologies Corp., RTX 2.91%  job-listings site Glassdoor and United Airlines Holdings Inc. UAL 11.74% also said in the past week that they had reduced jobs or planned to do so.

This is what an economic depression looks like, and it is going to be so incredibly painful.

And it is critical to understand that what we have experienced so far is just a warm-up act for the next chapters.

If you remember how bitter the last recession was, that should motivate you to take action to prepare for what is ahead, because this economic downturn is already even worse.

Yes, the months in front of us will be exceptionally challenging, but you can get through this.  Things may look really bleak, but for now you just need to keep hanging in there.

There will be life on the other side, but your future may end up looking far different than you originally anticipated.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

We Are Witnessing Economic Carnage Like We Have Never Seen Before, And The Economy Is Going To Continue To Bleed Jobs

Now we are up to 33.5 million jobs lost.  In just 7 weeks, the U.S. economy has been completely turned upside down, and the numbers are unlike anything that we have ever seen before.  On Thursday, the Labor Department announced that 3.17 million Americans filed initial claims for unemployment benefits last week.  That brings the grand total for this crisis up to 33.5 million, and that figure absolutely dwarfs what we witnessed during the last recession.  And as I discussed yesterday, even the mainstream media is now admitting that millions of those jobs are never coming back.

Yes, some Americans will be going back to work now that the lockdowns are being ended, but for now it is being projected that the job losses will continue to surpass any gains that are made by workers that are returning to their old jobs.

In fact, one prominent economist told CNBC that it will likely take until mid-June before the number of Americans filing new claims for unemployment benefits each week falls below a million…

At the current pace, the week claims numbers should fall below 1 million by mid-June, according to Ian Shepherdson, chief economist at Pantheon Macroeconomics. “We’re very hopeful that June will see the beginnings of a rebound as states begin to reopen,” Shepherdson said.

To put that in perspective, prior to this year the all-time record for a single week was just 695,000.

So even when we get down to a million new claims each week, that will still be a catastrophic level.

And the truth is that these numbers don’t even tell the entire story.  Because state unemployment websites have been so overwhelmed, there are vast numbers of unemployed Americans that still have not been able to successfully file claims.

One of those unemployed Americans is Florida resident Roselande Guerrier…

Roselande Guerrier lies in bed each night, waiting for her cellphone to display 7:30 a.m. – when the Florida unemployment office opens – and calls, aching for answers, searching for help.

“All night, my eyes are open,” she said. “Five o’clock, my eyes are open. I call at 6 o’clock and the office is closed. I call at 7:30 and boom, ‘All lines are busy.’ Every number they give me, I try, but they’re always busy.“

She has been trying day after day, and she still hasn’t been successful.

So for now she doesn’t have a single penny coming in, and she has three hungry kids to feed…

Guerrier, 36, has spent 13 years changing sheets, picking up dirty towels and scrubbing bathrooms as a housekeeper at the Fontainebleau hotel, the iconic Miami Beach resort. At night, she would do the same at the Cadillac Hotel & Beach Club, an art deco resort a few blocks away.

Both those jobs vanished on March 23 when the hotels were forced to close because of the COVID-19 pandemic. With three children to care for, she hasn’t seen a nickel of unemployment benefits or federal relief money.

Could you imagine being in her situation?

When you have little ones depending on you, it can be absolutely soul crushing to have nothing to provide.

Sadly, the job losses just continue to roll on.  This week, several more big companies have publicly announced layoffs…

The layoff announcements by larger companies continue on a daily basis. Yesterday, Uber announced that it would lay off 3,700 people; Haliburton announced that it would lay off 1,000 people at its corporate headquarters, after having already laid of thousands of people elsewhere; the Natural History Museum in New York City announced it would lay off 450 people; etc. etc. It’s a loud and terrible drumbeat. Thousands of smaller companies are laying off people without media attention.

If you were assuming that the U.S. economy would just bounce back to where it was before, you can forget about that right now.

In fact, Bob Michele told Bloomberg that it may be more than a decade before U.S. employment returns to the levels that we saw prior to this pandemic…

J.P. Morgan Chief Investment Officer Bob Michele predicted it will take 10-12 years after the pandemic for U.S. employment to get back to its pre-coronavirus level, insisting it won’t be as simple as turning the economy back on.

“No, it’s not that simple … it’s going to take years, or longer to get back to where we are, or where we were,” Michele said on Bloomberg when asked if reopening would be as simple as “turning on the lights.”

Ladies and gentlemen, this is what an economic depression looks like, and it is going to be with us for the foreseeable future.

Of course Congress certainly didn’t help matters when they created a big, fat juicy incentive for people to stay unemployed.  As Zero Hedge reminds us, millions of unemployed workers are now bringing home a lot more money than when they were actually working…

Worse still, the final numbers will likely be hurt even more due to the bailout itself: as a reminder, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed on March 27, could contribute to new records being reached in coming weeks as it increases eligibility for jobless claims to self-employed and gig workers, extends the maximum number of weeks that one can receive benefits, and provides an additional $600 per week until July 31. A recent WSJ article noted that this has created incentives for some businesses to temporarily furlough their employees, knowing that they will be covered financially as the economy is shutdown. Meanwhile, those making below $50k will generally be made whole and possibly be better off on unemployment benefits.

I certainly don’t understand why Congress would do such a thing.

If only we had elected at least a few people that could have brought some common sense to that institution…

Getting back to the economy, we continue to get more evidence that we are in the midst of a complete and utter economic implosion with each passing day.

For example, we just learned that orders for Class 8 trucks in April were down a whopping 73 percent compared to a year ago…

The misery in Class 8 heavy duty truck orders continues. Still struggling with the remnants of an order backlog that started almost two years ago with record orders in August 2018, the industry was unable to find an equilibrium prior to the coronavirus pandemic. Orders were sluggish and we noted numerous trucking companies that closed up shop altogether in 2019.

Post-pandemic, things look even more helpless. In April, the industry posted its worst order number on record as the economy ground to a halt as a result of the nationwide lockdown. Only 4,000 Class 8 orders were made last month, which is down 73% year over year and 44% from March.

Virtually every corner of the economy is dramatically slowing down, and that is going to force more layoffs in the months ahead.

As I discussed yesterday, one survey just found that 52 percent of all small business owners expect to be out of business in the next six months.  Traditionally, small businesses are the primary engine of job growth in this country, but now they are going to be failing at an unprecedented rate.

One of those small businesses that is in the process of failing belongs to wedding invitation designer Emily Rose Asher…

Wedding plans nationwide have been shot to hell in this age of social distancing. But Chicago-based calligrapher and wedding invitation designer Emily Rose Asher still has some work creating “save the NEW date” cards that couples are now sending to guests when they decide to reschedule their big event.

Still, Asher said, whereas she used to earn thousands of dollars during wedding season, she’s now earning hundreds. And the fact that she still has any income at all likely will disqualify her for unemployment benefits. But she did apply for a PPP loan at the end of April after trying to sort through conflicting guidance from two accountants about her eligibility.

I have such respect for people that create a business out of nothing and slowly nurture it into a success.

But now fear of COVID-19 threatens to kill millions of such businesses.

In other words, millions of hard working Americans are about to see their dreams go up in smoke right in front of their eyes.

It is a tragedy of almost unimaginable proportions, and I wish that it wasn’t happening.

But it is happening, and what is truly sad is that all of this could have been avoided if we had made much different choices.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

The Number Of Jobs Lost In April Was More Than Double The Total Number Of Jobs Lost During The Last Recession

Yes, you read that headline correctly.  The economic downturn of 2008 and 2009 is often referred to as “the Great Recession” because the U.S. had not experienced economic pain of that magnitude since the Great Depression of the 1930s.  Millions of Americans lost their jobs, mortgage defaults soared and Wall Street was shaken to the core.  But as bad as things were during the last recession, things are even worse now.  To say that what we are witnessing is “unprecedented” doesn’t do it justice, because what is happening to the U.S. economy in 2020 is truly, truly horrifying, and many believe that what we have experienced so far is just the beginning.

ADP has been tracking private payrolls in the United States for many, many years, and each month their payroll report is watched very carefully by economists.

Prior to this year, the worst month in the history of the ADP report was in February 2009 when 834,665 jobs were shed from U.S. private payrolls.  Needless to say, that old record just got completely shattered…

Private payrolls hemorrhaged more than 20 million jobs in April as companies sliced workers amid a coronavirus-induced shutdown that took most of the U.S. economy offline, according to a report Wednesday from ADP.

In all, the decline totaled 20,236,000 — easily the worst loss in the survey’s history going back to 2002 but not as bad as the 22 million that economists surveyed by Dow Jones had been expecting. The previous record was 834,665 in February 2009 amid the financial crisis and accompanying Great Recession.

So what this means is that the number of private payroll jobs lost in the United States last month was more than 24 times greater than the previous all-time record.

In fact, the number of private payroll jobs lost last month was more than double the total number of jobs lost during the last recession…

“Job losses of this scale are unprecedented,” said Ahu Yildirmaz, co-head of the ADP Research Institute, which compiles the report in conjunction with Moody’s Analytics. “The total number of job losses for the month of April alone was more than double the total jobs lost during the Great Recession.”

We have never seen an unemployment spike like this ever before, and we may never see a spike quite like it ever again.

Of course there are some people out there that have been quick to remind me that many of these job losses are “temporary” and that millions of Americans will soon be going back to work.

Yes, as states begin to end their lockdowns the U.S. economy will regain millions of the jobs that have been lost.

But there are also millions of jobs that we aren’t ever going to get back.  The following comes from a Bloomberg article entitled “Layoffs Start Turning From Temporary to Permanent Across America”…

Plenty of layoffs that just a month ago were labeled “temporary” are now tagged “indefinite” or “permanent.” Alongside announcements of sweeping staff cuts by major employers such as Boeing Co. and U.S. Steel Corp. and the accelerating pace of downsizing in brick-and-mortar retailing, such notices are a sign that even as businesses continue to hope for a speedy recovery, they are starting to plan for a slow one.

I personally know quite a few people that have permanently lost their jobs, and you probably do too.

This week, we learned that Lord & Taylor plans to start the process of liquidating, and all of their employees will soon be out on the street on a permanent basis…

Venerable U.S. retailer Lord & Taylor plans to liquidate inventory in its 38 department stores once restrictions to curb the spread of coronavirus are lifted as it braces for a bankruptcy process from which it does not expect to emerge, people familiar with the matter said on Tuesday.

Lord & Taylor’s preparations to liquidate its inventory as soon as its stores reopen offer a window into the grim future of a high-profile retailer – a storied department store chain founded in 1826 and billed as the oldest in the United States – that does not expect to survive the pandemic’s economic fallout.

But much, much, much more importantly, we are about to see a wave of small business failures in the United States that will absolutely dwarf anything that we have ever seen before in our history.

Governors all across America can end the lockdowns, but they can’t order people to go out and spend money.  For many months to come, fear of COVID-19 is going to prevent millions of consumers from resuming their normal economic patterns, and so small businesses all over the country will be facing greatly reduced revenues for the foreseeable future.

Needless to say, many of them aren’t going to make it and those that fail are going to have to let all of their workers go.  In an article that I just posted, I discussed a stunning new survey that discovered that 52 percent of all small business owners in the United States “expect to be out of business within six months”.

We are talking about millions of businesses that may soon be saying goodbye to all of their employees for good.

Giant corporations have the resources to make it through an extended downturn, but most small businesses do not.  It is hard enough to try to run a profitable small business even when conditions are ideal, but now this pandemic has made that task nearly impossible in many cases.

So yes, the U.S. economy will recover some of the jobs that were lost during the lockdowns, but we will also continue to bleed more jobs in the months ahead.

I know that a lot of my readers are quite eager for a return to “normal”, but we have to realize that the “old normal” is gone.

Instead, a “new normal” is starting to emerge, and on Tuesday California Governor Gavin Newsom warned that we won’t fully get there “until we get to immunity and a vaccine”…

California Gov. Gavin Newsom said as many counties around the state prepare to reopen retail for curbside pickup Friday, maintaining physical-distancing measures will be crucial to reduce the risk of coronavirus spread.

“We’re not going back to normal,” said Newsom, who gave Tuesday’s press briefing from the site of a Sacramento business called Display California. “It’s a new normal with adaptations and modifications, until we get to immunity and a vaccine.”

Unfortunately, it is exceedingly unlikely that we will reach “herd immunity” in the United States before 2021, and the quest for a “vaccine” is not going to be easy.

If you doubt this, just do some research and find out how many other successful coronavirus vaccines there have been in our history.

When they tell you that an easy solution is right around the corner, they aren’t being honest with you.

Meanwhile, the U.S. economy is literally imploding all around us, and this is just the start of our troubles.

The good news is that COVID-19 is not as deadly as many were originally projecting.  Instead of millions dead, the final death toll in the U.S. will probably only be in the hundreds of thousands.

As this pandemic eventually begins to subside, use it as an opportunity to get prepared for what is coming next, because COVID-19 is definitely not the worst thing we are going to face.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

18 Signs That We Are Facing A Record Breaking Economic Implosion In 2020

In just six weeks, the entire global economy has completely come apart.  All over the world we are seeing numbers fall faster than we ever have before, and the outlook for the rest of the year is exceedingly bleak.  Fear of the coronavirus is going to paralyze global trade for the foreseeable future, and the lockdowns in some nations will last for many months to come.  Here in the United States, some states are attempting to make an effort to “reopen”, but in most instances that will involve “multiple stages”.  Meanwhile, tens of millions of Americans have already lost their jobs, much of the population has already run through their meager savings, and financial institutions are becoming extremely tight with their money.  Even if COVID-19 disappeared tomorrow, our momentum would still take us into an economic depression, but of course this virus isn’t going to disappear any time soon.  After 9/11 our society evolved into an anti-terror state, and COVID-19 is going to permanently alter our society as well.  So anyone that was hoping for a quick “return to normal” can forget it, because “normal” is about to be completely redefined.

The pace at which economic conditions have deteriorated in recent weeks has been absolutely breathtaking, and the numbers just keep getting worse and worse.

The following are 18 signs that we are facing a record breaking economic implosion in 2020…

#1 According to economists surveyed by the Wall Street Journal, the April jobs report will show that the unemployment rate in the United States is now above 16 percent.

#2 U.S. manufacturing orders just crashed by the most ever.

#3 U.S. gasoline consumption just dropped to the lowest level ever recorded.

#4 Light vehicle sales in the U.S. just fell to the lowest level that we have seen since the early 1970s.

#5 The government program that was supposed to get small businesses through this crisis has been a tremendous failure…

According to the CNBC/SurveyMonkey Small Business Survey released Monday, which surveyed 2,200 small business owners across America, while the $660 billion Paycheck Protection Program was instituted to give them a lifeline through the coronavirus and economic shutdown, only 13% of the 45% who applied for the PPP were approved.

#6 The “coming meat shortages” are already here.  According to the New York Post, Costco is now rationing meat and Kroger is warning customers of very serious supply problems…

Costco on Monday said it will be limiting customers to just three packages of meat per shopper, while Kroger supermarkets posted an alert on the meat section of its website warning that it may have limited inventory “due to high demand.”

Grocers have been bracing for a run on meat in mid-May as major meat processing plants, including Tyson Foods, have been forced to shut down production. But the shortages appear to have come earlier than expected as consumers worried about the meat shortage have been stocking up, experts say.

#7 Global smartphone shipments were down 11.7 percent in the first quarter compared to a year ago.  That represents the fastest drop on record.

#8 Hong Kong just recorded the worst economic contraction in the city’s entire history.

#9 U.S. consumer spending was down 7.6 percent during the first quarter of 2020.

#10 American Airlines posted a loss of 2.2 billion dollars during the first quarter of 2020.

#11 It looks like retail giants Neiman Marcus, J. Crew and JC Penney are all headed for bankruptcy.

#12 Fox Business is reporting that Hertz is preparing to file for bankruptcy due to plunging car rental ridership.

#13 Gold’s Gym field for bankruptcy on Monday.

#14 Edmunds is projecting that auto sales in the United States this month will be down by more than half compared to April 2019.

#15 In Mexico, manufacturing activity is falling at the fastest pace ever recorded.  The following comes from Zero Hedge…

While few have lofty expectations for economic performance with the global economy still largely shutdown, what is happening in Mexico is simply unprecedented. Here are some striking observations detailing the unprecedented economic collapse of the southern US neighbor, courtesy of Goldman.

Business confidence declined sharply in April (the seventh consecutive monthly decline) with the index now sitting deep within pessimist territory. The Manufacturing and Services PMIs also fell sharply in April, and are now at the lowest levels on record.

#16 More than 30 million Americans have already lost their jobs, and economists are projecting that millions more will lose their jobs in the weeks ahead.

#17 In March, U.S. home sales declined by double digit percentages in every region of the country.

#18 White House economic adviser Kevin Hassett is warning that U.S. GDP could fall by up to 30 percent during the second quarter of 2020.

For investors, the good news is that stock prices have bounced back quite a bit after the initial crash, and many market optimists are hoping that this Fed-fueled rally will keep on rolling.

But others are warning that this is a trap for bullish investors, and Kevin Smith is openly telling everyone that this could be the “last chance to sell” before another huge move downward…

The stock market may be flashing some ridiculously bullish signals, but hedge fund bear Kevin Smith is sticking by his prediction that the Dow and S&P 500 are on the verge of a Great Depression-level crash.

In fact, the Crescat Capital founder warns, this is your “last chance to sell” before the impending collapse.

We shall see what happens, but for the moment the financial markets are doing their best to try to defy economic reality.

Unfortunately, economic reality is hitting most Americans like a ton of bricks right now.  We are in the middle of the greatest spike in unemployment that the United States has ever seen by a very wide margin, and most of the jobs that have been lost are never coming back.

And as bad as things are already, the truth is that this is just the beginning.

A whole lot more pain is on the way, and it is going to shake our nation to the core.

Our economic and financial bubbles lasted far longer than they should have, but now fear of COVID-19 has burst them all, and it isn’t going to be possible to reinflate them this time around.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

About One-Fifth Of All The Jobs In The U.S. Are Already Gone, And This Economic Depression Is Just 6 Weeks Old

In all of U.S. history we have never seen anything like this.  I have been sitting at my desk for quite a while searching for the proper words to convey the gravity of what we are facing, and to be honest it has been quite a struggle.  On Thursday, we learned that another 3.8 million Americans filed initial claims for unemployment benefits last week.  That was much higher than many experts were anticipating, because by now the initial surge of unemployment caused by the coronavirus lockdowns should have started to fade quite a bit.  But instead, the job loss tsunami continues to roll on, and at this point a total of 30.3 million Americans have filed new claims for unemployment benefits over the past six weeks.  The following comes from ABC News…

Roughly 30.3 million people have now filed for jobless aid in the six weeks since the coronavirus outbreak began forcing millions of employers to close their doors and slash their workforces. That is more people than live in the New York and Chicago metropolitan areas combined, and it’s by far the worst string of layoffs on record.

According to numbers that come straight from the Federal Reserve, more than 152 million Americans were working in February, and that was an all-time high.

So losing 30.3 million jobs in six weeks means that nearly one-fifth of all jobs in the United States have officially vanished in just a month and a half.

And actually things are even worse than that, because millions of Americans still have not been able to successfully file claims because state unemployment websites have been so overloaded.  Just check out these truly alarming numbers from the Economic Policy Institute…

The Economic Policy Institute found that for every 10 people who said they successfully filed a jobless claim in the previous four weeks, three to four more attempted to apply but couldn’t get through the system to file a claim.

Meanwhile, another two people didn’t even bother to try because it seemed too hard.

State unemployment websites were never designed to handle this sort of an onslaught.  For some unemployed Americans, attempting to get the benefits that they have been promised can be an exceedingly frustrating experience…

Marci Oberst sat down at her computer Tuesday and embarked on what’s become a daily ritual – trying to log onto the Maryland Department of Labor’s website so she can extend her unemployment insurance.

At 9:30 AM, she was number 88,000 in line, according to the state’s labor website.

Number 88,000 in line?

How is that even possible?

Sadly, this is what an economic collapse looks like, and the months ahead are going to be exceedingly painful.

Needless to say, economic activity has come to a virtual standstill during these lockdowns, and this is really starting to show up in the numbers.  For example, Edmunds is projecting that U.S. auto sales will be down by more than half compared to last April…

The car shopping experts at Edmunds say that April will be a record down month for the auto industry due to the coronavirus (COVID-19) pandemic, forecasting that 633,260 new cars and trucks will be sold in the U.S. for an estimated seasonally adjusted annual rate (SAAR) of 7.7 million. This reflects a 52.5% decrease in sales from April 2019, and a 36.6% decrease from March 2020. Edmunds analysts note that this is the lowest-volume sales month dating back to at least 1990; the second worst month for sales in the past 30 years was January of 2009, when 655,000 vehicles were sold.

And major retailers are failing so rapidly now that it is hard to keep up with all the carnage.

The latest major victim to make headlines is J. Crew…

Clothing apparel company J. Crew is preparing for a bankruptcy filing that could come as soon as this weekend, people familiar with the matter tell CNBC.

Privately held J. Crew is working to secure $400 million in financing to fund operations in bankruptcy, said the people, who requested anonymity because the information is confidential. They cautioned that timing could still slip, and plans are not yet finalized.

COVID-19 has created an environment of great fear, and as I have been warning for a very long time, financial institutions tighten the flow of credit in such an environment.

We saw this happen during the last financial crisis, and it is starting to happen again now.

All over America we are seeing lending conditions being greatly tightened, and Wall Fargo just announced that they will no longer be taking applications for HELOCs at all…

Wells Fargo, one of the largest home lenders in the U.S., is stepping away from the market for home equity lines of credit because of uncertainty tied to the coronavirus pandemic.

The bank informed its mortgage personnel of the news Thursday in a conference call, according to a source, and the move was confirmed by company spokesman Tom Goyda.

I was absolutely floored when I first read that.

Our entire system depends on easy credit, and these changing conditions are going to create quite a bit of chaos for the foreseeable future.  Americans are going to find that it is much, much more difficult to be approved for home loans, auto loans and credit cards, and that is going to greatly depress economic activity.

Fear is also deeply affecting U.S. consumers, and at this point they are hoarding cash at a pace that we haven’t seen since the 1980s…

Americans are so nervous about the state of the economy that they are stashing cash in the bank at a rate not seen since the first year of Ronald Reagan’s presidency.

The United States government’s Bureau of Economic Analysis reported Thursday morning that the savings rate surged to 13.1% in March — up from 8% in February.

But of course there are tens of millions of Americans that have already run through their savings and can’t hoard cash because they don’t have any left.

According to one brand new survey, many of those Americans now find themselves unable “to pay the rent, mortgage or utility bills”…

The coronavirus’ seismic hit on the U.S. economy is rattling people’s finances. Roughly 41% of working-age adults say their families have experienced a job loss, a decrease in work hours or other employment-related declines in income in recent weeks, according to a new analysis by the Urban Institute.

Underscoring the jump in financial distress around the country: More than 4 in 10 of Americans whose work was affected by the pandemic said they weren’t able to pay the rent, mortgage or utility bills; skipped medical care; or were at risk of going hungry.

Fear of COVID-19 turned out to be the “black swan event” that burst our debt-fueled economic bubble, but this economic depression would not end even if the coronavirus pandemic suddenly disappeared tomorrow.

Now that the economic dominoes are tumbling, all of the economic momentum is taking us in just one direction, and nobody is going to be able to reverse this process now that it has started.

Next week, a couple more million unemployed Americans will probably be added to our rapidly growing total, and it is just a matter of time before “great civil unrest” starts breaking out.

Our debt-fueled economy and our Ponzi scheme financial system were never going to be sustainable in the long run, and many have been warning for years that we would eventually be facing this sort of a scenario.

Now it is here, and I wish that I could tell you that everything is going to be okay and that our leaders are going to be able to put the pieces of our shattered economy back together, but I can’t.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

The Economic Numbers That Are Coming Are “Going To Be The Worst In The Post-World War II Era”

We just witnessed the largest quarterly GDP decline since the last financial crisis, and experts are warning that the figure for the second quarter will be far, far worse.  In fact, as you will see below, one expert is telling us to brace ourselves for the worst economic numbers “in the post-World War II era”.  On an annualized basis, U.S. GDP fell by 4.8 percent during the first quarter, and that was a bit worse than most economists were projecting.  And economists were also surprised that consumer spending was down 7.6 percent and business investment was down 8.6 percent during January, February and March.  Under normal circumstances, those would be absolutely horrible numbers, but these are not normal circumstances.  Yes, January and February were relatively normal, but the coronavirus shutdowns began in March and that is why these numbers are so dismal.

Unfortunately, it looks like the economic numbers for the second quarter are going to be much more depressing.  One economist that was interviewed by the New York Times believes that they will actually be the worst that our nation has seen since the end of the Second World War…

“They’re going to be the worst in our lifetime,” Dan North, chief economist for the credit insurance company Euler Hermes North America, said of the second-quarter figures. “They’re going to be the worst in the post-World War II era.”

And at this point even the Trump administration is publicly admitting that the economic numbers are going to start getting really, really bad.  On Monday, Kevin Hassett actually told CNBC that U.S. GDP could fall by up to 30 percent on an annualized basis during the second quarter…

On Monday morning, the White House economic adviser Kevin Hassett warned the second quarter could reflect a 20 to 30 percent decline – something that has not been seen since the 1930s Great Depression.

‘You’re looking at something like minus 20 percent to minus 30 percent in the second quarter. It’s a very grave shock and it’s something we need to take seriously,’ he told CNBC.

But we don’t have to wait until three months from now for numbers that are truly horrific.

On Wednesday, we learned that U.S. home sales in March were down by double digits in every region on the country…

Signed contracts to purchase existing homes, referred to as pending home sales, fell 20.8% compared with February and were 16.3% lower annually, according to the National Association of Realtors.

Regionally, pending sales fell 14.5% in the Northeast for the month and were 11% lower than a year ago. In the Midwest, sales decreased 22% monthly and 12.4% annually. In the South sales dropped 19.5% for the week and 17.8% annually, and in the West they fell 26.8% weekly and 21.5% compared with a year ago.

Some states are attempting to gradually “reopen” their economies, and that is good news.

But the bad news is that officials are telling us that all of the restrictions in big states such as California and New York will not be lifted until many months from now, and that is going to greatly depress economic activity for the foreseeable future.

With economic activity so low, companies all over America are laying off workers at a staggering rate.  More than 26 million Americans have lost their jobs so far, and the layoffs just keep on rolling.  For example, we just learned that Uber is planning to let thousands of employees go…

Executives at Uber are discussing plans to cut around 20% of the company’s employees, as it copes with a sharp decline in its ride-hailing business due to the coronavirus pandemic, reports The Information.

Layoffs of that magnitude, which haven’t been finalized but could be announced in stages in the coming weeks, could result in more than 5,400 of Uber’s 27,000 employees losing their jobs.

Of course it isn’t just the United States that is facing an unprecedented unemployment crisis.

According to the International Labour Organization, close to half of all the workers in the world “are in immediate danger of losing their livelihoods”…

Some 1.6 billion workers in the informal economy, representing nearly half of the global labour force, are in immediate danger of losing their livelihoods due to the coronavirus pandemic, the International Labour Organization (ILO) said on Wednesday.

The U.N. agency’s latest report sharply raised its forecast for the devastating impact on jobs and incomes of the COVID-19 disease, which has infected more than 3.1 million people globally, killed nearly 220,000 and shut down economies.

This is one of the biggest reasons why lockdowns all over the globe need to be ended as quickly as possible.  If people are not allowed to make a living, they aren’t going to have anything to feed their families.

Even in the United States, we have already seen an explosion of need that is absolutely shocking.  All over the country, people have been lining up for miles to get whatever food that local food banks are able to give them, and we witnessed more examples of this growing phenomenon on Tuesday…

Masses of cars waited in line for the drive-thru food giveaway in Pico Rivera, California, as volunteers sporting face masks, gloves and high-vis jackets helped dish out supplies.

Over in Prospect, vehicles were seen snaking through the Big Butler Fairgrounds. It comes as millions of people across America lose their jobs amid the coronavirus pandemic and households have been thrown into turmoil.

If things are this bad already, what is this nation going to look like as we get even deeper into “the perfect storm”?

In recent days I have been writing quite a bit about the coming “meat shortage” that the mainstream media has been warning about, and now we are being told that a serious shortage of boneless chicken is already upon us…

Goodbye, boneless chicken.

Food retailers across North America are swapping boneless chicken legs for less popular thighs and drumsticks as a wave of shutdowns at meatpacking plants has reduced supplies of sought-after cuts.

As I discussed yesterday, President Trump has decided to order meat processing facilities that were closed down because of COVID-19 to reopen, and many are hoping that this move will put a quick end to the shortages.

But on Wednesday the mainstream media was full of stories about how meat processing workers may decide to defy President Trump and refuse to go back to work…

Meat-processing plant workers are concerned about President Donald Trump’s executive order that compels plants to remain open during the coronavirus pandemic. Meat plant employees are among America’s most vulnerable workers, and some say they expect staff will refuse to come to work.

“All I know is, this is crazy to me, because I can’t see all these people going back into work,” said Donald, who works at Tyson’s Waterloo, Iowa, facility. “I don’t think people are going to go back in there.”

If fear of COVID-19 keeps a substantial percentage of workers from returning to their jobs, that could cause the emerging meat shortages to get even worse in the weeks ahead.

Of course fear of the coronavirus is paralyzing many sectors of our economy right now, and that is not going to end any time soon.

So we should expect really dismal economic numbers for the foreseeable future, and it appears exceedingly unlikely that there will be any sort of a turnaround before the election in November.

America’s next economic depression has begun, and it is going to be really, really painful.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

Are You Ready For The Great Depression Of The 2020s?

For those of you that were expecting just a “deep recession”, I am afraid that you are going to be very disappointed.  It took years for the U.S. economy to fully unravel in the 1930s, but now we have witnessed a similar level of economic devastation in just a matter of weeks.  More than 26 million Americans have already lost their jobs, economic activity has come to a standstill, people are lining up for miles at food banks all over the nation, and businesses are being permanently shuttered at a staggering pace.  But the good news is that some states will attempt to “reopen” their economies in the weeks ahead.  In most instances, there will be several stages before all of the restrictions are finally lifted, and that means that economic suffering will be stretched out for an extended period of time.  And of course if cases and deaths start spiking again we could see another wave of strict lockdowns all over the country, and needless to say that would greatly escalate this economic downturn.

At this moment, so many hard working people all over America are deeply hurting.

I personally know people that have lost their jobs, and you probably do too.  And because virtually nobody is hiring right now, it is going to be exceedingly difficult for newly unemployed workers to find other jobs.

Because it has an economy that is so dependent on the entertainment industry, Nevada is being hit particularly hard by this downturn.  The New York Times spoke to one Nevada resident named Valicia Anderson, and she hardly knows anyone that is still actually working…

When Valicia Anderson starts to count the people she knows in Las Vegas who have lost their jobs, she runs out of fingers fast.

Her husband, the breadwinner of her family and a restaurant worker in the Rio casino. All 25 of his co-workers. Her grown son, in a temp agency. The technician who does her nails. The barber who cuts her husband’s hair. Her best friend, a waitress. The three servers and a manager at the TGI Friday’s that is her family’s favorite treat.

It has been estimated that the current unemployment rate in the state is “about 25 percent”, and that number is almost certainly going to go higher in the months ahead.

Down in Texas, they are also dealing with an oil crash at the same time that they are wrestling with this coronavirus pandemic, and this has created the worst budget crisis that the city of Houston has ever seen…

On the same day that the price for U.S. crude oil fell to about $30 below zero — a mind-bending concept and the first time oil prices had ever turned negative — Mayor Sylvester Turner of Houston, the self-proclaimed energy capital of the world, stood before reporters. His words were grim and muffled by the black mask covering his face.

The mayor announced that city employees would soon be furloughed, but he declined to say how many. The Houston Zoo, he said, could expect to see funding deferred under what he called “the worst budget that the city will deal with in its history.”

The high paying energy industry jobs that fueled an incredible real estate boom in Texas are now disappearing by the thousands, and it is being reported that many of those that are being laid off are learning the news “during painful Zoom sessions from home”…

Thousands of energy workers, some of whom only lately moved to the region to take advantage of the recent prosperity, have been laid off. Many of them were told the bad news during painful Zoom sessions from home.

Warning letters from energy companies have been flooding the Texas Workforce Commission about layoffs and furloughs: 3,500 at Halliburton, 223 at Tenaris, 184 at Baker Hughes, 102 at Diamond Offshore Drilling, 95 at Energy Transfer.

By the way, when did Zoom become such a big thing?

It seems like so many people are using it now, and I don’t understand why it is so popular.

Perhaps my readers will help me to understand this.

Getting back to the economy, at this point even the Trump administration is admitting that the unemployment rate will soon be approaching levels that “we saw during the Great Depression”…

White House senior advisor Kevin Hassett says US economy is in “grave situation” and the unemployment rate could be hitting the same numbers seen during the Great Depression due to the Covid-19 pandemic.

“We’re going to be looking at an unemployment rate that approaches rates that I think we saw during the Great Depression,” Hassett told ABC’ ‘The Week’ on Sunday.

Let’s put that into perspective for a moment.

During the last recession, we thought that things were really, really bad when the unemployment rate got up to about 10 percent.

But back in 1933 the unemployment rate peaked at 25 percent, and now we are being told that we should expect something similar here in 2020.

Wow.

And of course low income Americans are being hit harder than anyone else.  Just check out these numbers…

Most Americans support stay-at-home restrictions to protect public health. And yet the burden of the country’s shutdown is disproportionately falling on those least prepared to handle it: About 52 percent of low-income Americans say they or someone in their household has experienced job upheaval, compared to 43 percent of the broader adult population, the Pew Research Center found. Only 23 percent of low-income Americans say they have enough emergency funds to last them three months.

Hopefully as some states attempt “reopenings” it will help to slow down this enormous tsunami of unemployment.

But as I pointed out the other day, millions of Americans are now making much more money being unemployed than they did when they were working, and so that is going to provide an incentive for millions of Americans to stay unemployed for the foreseeable future.

And even if all of the coronavirus restrictions in the entire country were lifted tomorrow, fear of the coronavirus would cause economic activity to be greatly depressed for many months to come.

As I discussed yesterday, the meat processing industry is a perfect example of this.  Meat processing facilities are being shut down all over the nation, and one expert just told NBC News that we should expect shortages of meat in our grocery stores “around May 1″…

Beef, chicken and pork could be as scarce as toilet paper soon because so many meat processing plants have been temporarily shut down amid the coronavirus pandemic, industry experts are warning.

“We’ve just completed our third week of reduced slaughter and production,” Dennis Smith, a commodity broker/livestock analyst with Archer Financial Services in Chicago, said. “My guess is that about one week out, perhaps around May 1, shortages will begin developing at retail meat counters.”

So many of the things that we have been warning about for a long time are starting to happen, but most Americans still do not grasp the seriousness of this crisis.

All of the economic dominoes are starting to fall, and even if the remainder of this pandemic goes much more smoothly than anticipated, it will not fundamentally alter our current economic trajectory.

The “Everything Bubble” lasted far longer than it should have, but now that it has burst the pain is going to be absolutely immense.

And it is those at the bottom of the economic food chain that are going to be hit the hardest.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

They Shut Down America To Slow Down The Coronavirus, But In The Process They Killed The Economy

Will our economy ever be the same again?  At this moment, we are still in the midst of the most comprehensive nationwide shutdown in American history, and nobody knows when it will finally end.  The primary reason why governors all over the country issued “shelter-in-place” orders was because they wanted to “flatten the curve”, and this was done to keep millions of people from getting the virus all at once so that our hospitals would not be completely overwhelmed.  But these “shelter-in-place” orders are not going to completely end this pandemic.  In order to do that, a complete and total national “lockdown” would be needed, and that is not going to happen.  So the coronavirus is going to keep cycling through our population for an extended period of time until we get to the point where the vast majority of the population has built up immunity and the pandemic naturally burns itself out.  So in the end, the total number of people that will catch this virus will be about the same whether the “shelter-in-place” orders were issued or not.  But if the number of cases at any one time isn’t enough to overwhelm our medical resources, the overall death toll could potentially be less than it otherwise would have been.

In other words, these “shelter-in-place orders” are likely saving lives, but they are also killing the economy.

On April 3rd, it was announced that more than 6 million Americans had filed new claims for unemployment benefits the previous week, and I told my readers that we would probably never see a week like that ever again.

I was wrong.

This Thursday, it was announced that another 6.6 million Americans filed new claims for unemployment benefits during the previous week…

Another 6.6 million people filed for unemployment benefits last week, according to the US Department of Labor, as American workers continue to suffer from devastating job losses, furloughs and reduced hours during the coronavirus pandemic.

It was the second largest number of initial unemployment claims in history, since the Department of Labor started tracking the data in 1967.

Prior to this year, the all-time record for a single week was just 695,000.

So what we are witnessing right now is completely nuts.

Overall, a total of approximately 16.8 million Americans have filed new claims for unemployment benefits over the last 3 weeks…

Altogether, about 16.8 million American workers, making up about 11% of the US labor force, have filed initial claims for jobless benefits in just the prior three weeks alone. About 7.5 million workers filed for their second week of benefits or more last week.

We already have more unemployed workers than we did at any point during the last recession, and it is only going to get worse with each passing week.

Meanwhile, other economic numbers have been absolutely abysmal as well.  National demand for gasoline has declined to the lowest level since 1968, and U.S. vehicle sales have plunged to levels that are absolutely catastrophic…

For the whole month of March, total new vehicle sales plunged 37.9% year-over-year, with fleet sales (rental, commercial, and government) down 27.6% and retail sales down 40.5%. In terms of daily retail sales volume, according to estimates by Cox Automotive, early March sales had been well above the sales on the same day of the week, same week last year.

But by March 13, they were below the year-ago-level and then plunged. By April 1, they were down 71% from a year ago.

I am having difficulty finding the words to describe how bad those numbers are.

If things are this horrific already, what will happen if the U.S. stays shut down for another month or two?

With millions upon millions of Americans out of work and businesses all over the nation currently shuttered, rent payments are not being made on a scale that is unlike anything we have ever seen before.  The following comes from Zero Hedge…

Previously we described that over 30% of US renters didn’t pay their April apartment rent as the fallout of coronavirus-induced mass unemployment claims continues to ripple across various key sectors. Despite that some tenants will receive temporary protection from evictions “by a patchwork of federal and local laws” the reality is that as unpaid rents pile up, so will mortgage defaults as landlords struggle to satisfy their obligations – which will in turn affect fixed-income investments backed by said mortgages.

On the commercial side, Bloomberg estimates that about $81 billion in commercial rent comes due on average each month, but of course this is anything but a typical month, resulting in “The delay of a sizable portion of that will put an enormous strain on the complex systems for financing real estate and highlight how quickly the pain caused by social distancing has spread,” as Bloomberg observes.

Domino after domino is going to fall, and the economic pain is going to be off the charts.

And with each passing week, the economic forecasts by the big banks just continue to get even worse.

At this point, JPMorgan is projecting that U.S. GDP will plunge at a 40 percent annualized rate during the second quarter…

JPMorgan economists issued an even more dire forecast, now foreseeing a 40% decline in the nation’s gross domestic product for the second quarter and a surge in April’s unemployment rate to 20% with 25 million jobs lost.

In an earlier forecast, they said second-quarter GDP would be down 25%.

The only period in all of U.S. history when we witnessed anything that even comes close to resembling this was during the Great Depression of the 1930s.

Of course Congress has tried to help by passing several relief bills, but in many instances they aren’t working quite as anticipated.

For example, a loan program for small businesses was originally supposed to provide up to 2 million dollars in emergency help for each business, but there has been so much demand that loans are now being capped at $15,000…

A federal disaster loan program offering up to $2 million in relief is now capping out at $15,000 — and is leaving some borrowers wondering if they’ll even get that.

The Economic Injury Disaster Loan program, an offshoot of the Small Business Administration’s emergency funds system, has faced an unprecedented number of requests amid the COVID-19 pandemic, and is having trouble keeping up and following through with promised loan amounts, The New York Times reports.

As this pandemic stretches on, it is probably inevitable that Congress will pass even more emergency measures, and needless to say the Federal Reserve is going completely bonkers when it comes to flooding the system with money.

Ultimately, what they are doing will create inflation like we have never seen before, but most Americans aren’t worrying about that right now.

What most Americans really want is to get back to work, but Dr. Anthony Fauci and other medical “experts” are warning that may not happen for some time.

The longer the economy is shut down, the deeper this economic downturn is going to become.  And we certainly don’t want it to get too much deeper, because the IMF is already warning that it looks like this economic downturn will be the worst since the Great Depression…

The International Monetary Fund sees the world economy suffering its worst recession since the Great Depression this year, with emerging markets and low-income nations in Africa, Latin America and Asia at particularly high risk.

With half of the IMF’s 189 member countries seeking aid, the executive board has agreed to double access to its emergency financing to meet expected demand of about $100 billion, Managing Director Kristalina Georgieva said in a speech on Thursday.

Needless to say, I have been warning of an economic crisis of this magnitude for a very long time.

Let us hope that the “shelter-in-place” orders will be lifted as soon as possible, because that would certainly give the economy some relief.

But things will not be going back to “normal”.  COVID-19 will start spreading faster once again once the restrictions are lifted, and a large percentage of the population will remain huddled in their homes because they will be extremely afraid of catching the virus.

So economic activity will remain depressed for an extended period of time no matter what else happens, and meanwhile Congress and the Federal Reserve are absolutely flooding the system with fresh money.

That is a recipe for an inflationary disaster, and our standard of living will experience a very painful adjustment as a result.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

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