Economics

3.2 million new claims for unemployment last week. Running out of negative words to describe the severity of job losses.

Unemployment by Sean MacEntee is licensed under CC BY 2.0

New unemployment claims for week ending 5/2/20 are 3,169,000, seasonally adjusted.

The tally of new claims is 33.48 million since the economy was put in an induced coma.

That means about 1 out of every 5 people in the civilian labor force back in February are out of a job today.

I’m running out of words to describe how horribly the economy has been hit. Seem to have exhausted the adjectives that apply. We have a terrible mess and it is going to take a long time to fully recover from the lost jobs and even longer to recover consumer and business confidence.

This discussion will be posted across several of my blogs.

Data:

Weekly press release from the Department of labor: Unemployment insurance weekly claims
Historical data: Unemployment Insurance Weekly Claims Data.
5/7/20 – Wall Street Journal – 3.2 Million Workers Filed Unemployment Claim Last Week

Expectations from economists interviewed by the WSJ, or perhaps we should say their wild guesses, are the flood of new claims will taper off in May. Will likely be months before the new jobs exceed the new unemployment claims. Will likely be years before new jobs offset the tidal waves of job losses in March, April, and May.

Summary of new claims and running total

I have prepared a running tally of the new unemployment claims, which is shown below.

California starts first few steps to start opening up the stalled economy.

Economic doors will start to open on Friday – Opening or closing? by Paolo Gamba is licensed under CC BY 2.0

Friday of this week, 5/8, California will take the first baby steps to revive the state’s economy. Some retail stores will be able to provide curb-side delivery of products.

I don’t quite know how many people will order clothes online in order to pick them up at a store’s curb, but that is a first step.

At least half the value of a bookstore is browsing the shelves to see what book you really have to read right but that you previously didn’t even know existed.

Well, it’s a baby step.

Several articles describe the beginning here in the state. First article describes that government officials better start opening up quick or they will find the everyone already has done so.

5/1/20 – Forbes – Apple Data Shows Shelter-In-Place Is Ending, Whether Governments Want It To Or Not – Apple and Foursquare are tracking data that show people are getting out more.

Three states tighten the shutdown while others start to revive their economy.

Green line is the unemployment rate in every state of the country. Red line is the financial health of universities, restaurants, airlines, and every small business. Sinkender roter und steigender grüner Pfeil symbolisieren das Auf und Ab des Aktienmarktes by Marco Verch is licensed under CC BY 2.0.

With extremely short notice, governors of Arizona and Tennessee extended the lockdown and economic shutdown in their states. California governor orders beaches closed in the county with lowest infection rate, leaving open beaches in county with three times higher rate.

Meanwhile, many other states are trying to allow their economies to re-start.

Arizona extends lockdown

4/29/20 – Fox 10 Phoenix – Gov. Doug Ducey extends Arizona’s stay-at-home order to May 15 – The shutdown and lock-in for Arizona was scheduled to expire in one day as the governor extended the economic catastrophe by 15 more days.

Economic stats show rapid disintegration of economy. Collapse in physical and emotional health won’t be this easy to calculate.

Unemployment office by Bytemarks is licensed under CC BY 2.0.

The economic statistics are rolling out to show the initial impact of the shutdown of the economy.

The collateral effect the shutdown and isolation will have on deteriorating emotional and mental health along with increased mortality due to postponed or canceled medical treatment will take years to quantify.

New stats in last few days:

3.8 million new unemployment claims this week
New unemployment claims in six weeks are now equal to 18% of the people who were working in February
CBO expects unemployment rate to average 11% for 2020
4.8% annualized drop in GDP for first quarter

New claims for unemployment

4/30/20 – Department of Labor – Unemployment insurance weekly claims – Another 3,839,000 people filed an initial claim for unemployment in the week ending April 25.

Massive hit to the aviation industry from the pandemic.

Pictures in February 2016 at Minneapolis airport. Photo by James Ulvog.

The entire aviation industry, including airlines, plane manufacturers, engine producers, and maintenance, will be devastated from the pandemic and shutting down the economy.

4/27/20 – Wall Street Journal – ‘Welcome to Your Flight, Nathan.’ Traveling During a Pandemic Means Having the Plane to Yourself – My first, second, and third reaction was to chuckle when reading an article describing multiple commercial flights with only one passenger. The description of pilots making the standard welcoming announcement that greets the sole passenger by name is funny.

Then I shuddered in fear at the absolute devastation to the entire economy from most fights being almost empty. The financial destruction will require years of recovery.

Untold numbers of airline, ground transportation, hotel, restaurant, and food vendor companies are being shattered. Incalculable numbers of companies will not survive.

A lovely sight not many of us will get to see in the near future. Photo by James Ulvog.

Work that collapse back to the airplane manufacturers…

By Jim Ulvog, 5 yearsApril 29, 2020, 11:05 am ago

Plans for California economy to slowly, gradually revive over the next year or more.

It will be months before you can visit one of these places in California. Image courtesy of Adobe Stock.

The California governor has laid out some general plans on how the state eventually will be taken off lockdown. There are four overall phases stretched over the next year or more. Highlights include:

Curb side pickup from retail stores will be allowed perhaps in weeks.
In-person worship services and getting a haircut will be allowed months from now.
Stay-at-home orders will not be lifted for a year or more.

Schools may start early, perhaps even in July. That will be conditioned upon schools having the ability to maintain safe distances between students.

This discussion will be posted on several of my blogs.

The graphic provided by the state describes the four stages:

The shutdown will be relaxed, one way or another.

Time to use the other side of those signs. Image courtesy of Adobe Stock.

If the politicians don’t start relaxing the lockdown and letting people pay their rapidly accumulating bills, bunches of people are going to take the initiative and do so on their own.

I sense there is a limited time for those in power to start loosening the extreme restrictions or people are going to start ignoring parts of the rules.

At a deeper level, the concern I have is what’s referred to as the “social contract.” Government gets its authority from consent of the governed.

If a large number of people get to the point of concluding the rules in places like California and Virginia are unnecessarily severe and are causing more health, mental, social, and economic damage than they prevent, people will conclude our leaders have broken the contract.

If we get to that point, respect for law and respect for public officials will decline. That is not a good place to go.

Next two articles point out a small number of people who have already reached that conclusion:

4/20/20 – Daily Wire – “Social Shredding”: Defiant Residents Grab Shovels, Dirt Bikes After Cali Authorities Dump Tons of Sand In Skateparks For ‘Social Distancing’ – Officials in San Clemente California noticed teenagers were committing the grave sin of skating in the city’s skate park. Well, that is patently unacceptable, so the city dumped 37 tons of sand into the skate park in an effort to shut down the skating. Since the park is at the beach, sand was readily available.

Well, the city officials did not take into consideration the incredible level of creativity present in humans, especially Americans.