Economists estimate 5.5 million more layoffs tomorrow - Printable Version
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Economists estimate 5.5 million more layoffs tomorrow - Mick - 04-15-2020
Economists are predicting 5.462 million more initial jobless claims tomorrow. Absent of revisions from prior weeks, that takes to 22,342,000 jobs lost in four weeks. 771 jobs lost for every death caused by the coronavirus as of this morning.
https://finance.yahoo.com/news/coronavirus-covid-weekly-initial-jobless-claims-april-11-192401571.html
Morgan Stanley thinks we'll hit 25 million lost in five weeks. That would take us to 16% of American jobs lost in five weeks. It took 1 3/4 years in the Great Depression to lose the same percentage of jobs.
RE: Economists estimate 5.5 million more layoffs tomorrow - BostonCard - 04-15-2020
That's an oddly precise "estimate". I suppose the one solace is that the pace of new job losses is (probably) slowing. Today's consumer spending numbers were awful and worse than expected.
https://www.cnbc.com/2020/04/15/the-economic-data-is-even-worse-than-wall-street-feared-the-economy-is-clearly-in-ruins-here.html
Quote:March retail sales fell 8.7%, the most ever in government data, and New York regional manufacturing activity hit an all-time low, declining to a shocking negative 78.2%.
BC
RE: Economists estimate 5.5 million more layoffs tomorrow - chrisk - 04-15-2020
How many of these people will be getting more in unemployment than they were working?
Along with the moratorium on evictions, things are less dire for them than they were in the Depression, when there was a minimal safety net.
RE: Economists estimate 5.5 million more layoffs tomorrow - oregontim - 04-16-2020
(04-15-2020, 11:32 PM)chrisk Wrote: How many of these people will be getting more in unemployment than they were working?
From Nolo Press, updated for the pandemic stimulus:
"All states also set an upper limit on the total weekly benefit amount. A common formula is to pay half of what the employee used to earn, up to a cap that's tied to the average earnings in that state. This means that employees with higher wages may receive a larger overall benefits check, but a smaller percentage of what they used to earn. The maximum amount an employee can receive each week varies widely from state to state.
"Some states provide an additional benefit amount to employees with dependents. These amounts tend to be small; most states that provide this benefit offer $25 or less per dependent per week in additional benefits.
"Unemployment benefits are taxable. You may elect to have up to 10% of your benefit amount withheld to pay federal income taxes."
This link
RE: Economists estimate 5.5 million more layoffs tomorrow - Mick - 04-16-2020
(04-15-2020, 11:32 PM)chrisk Wrote: How many of these people will be getting more in unemployment than they were working?
Along with the moratorium on evictions, things are less dire for them than they were in the Depression, when there was a minimal safety net.
Virtually none. I furloughed a secretary who was making $46k. If she made the max ($450/wk unemployment+$600/wk stimulus), she'd be eligible for $54,600 annualized. But the $600 stimulus payment is just for four months. And she wasn't with us long enough to get the full $450. Last hired, first fired, which is the way most of us handled these things. If she remains long term unemployed, she'll get about $23,400 over the next 12 months. The $450 is fully taxable. The $600 is subject to federal income tax, but FICA/Medicare exempt.
Actual initial unemployment claims filed were 5.245 million, bringing the four week total to 22,034,000 unemployed. That's 14.2% of the workforce, added to the pre-pandemic 3.5%, making 17.7%. It took two years of the worst economy in America's industrial age to reach that level, and we reached it in just four weeks.
RE: Economists estimate 5.5 million more layoffs tomorrow - 82lsju - 04-16-2020
(04-15-2020, 09:40 PM)Mick Wrote: Economists are predicting 5.462 million more initial jobless claims tomorrow. Absent of revisions from prior weeks, that takes to 22,342,000 jobs lost in four weeks. 771 jobs lost for every death caused by the coronavirus as of this morning.
https://finance.yahoo.com/news/coronavirus-covid-weekly-initial-jobless-claims-april-11-192401571.html
Morgan Stanley thinks we'll hit 25 million lost in five weeks. That would take us to 16% of American jobs lost in five weeks. It took 1 3/4 years in the Great Depression to lose the same percentage of jobs.
was on a call with a "noted economist", at least he sure thought he was. He said that typically 50% of jobless claims don't actually make it to unemployment status, they find jobs before they get benefits. He thought that this time that number would be ~30%. He also thinks the bounce back in Q3 won't be as strong as some of he current estimates (e.g. Goldman Sachs with -34% Q/Q in Q2 and +19% Q/Q in Q3). He also suggested looking at GDP by quarter Y/Y changes instead of Q/Q since that's the way most businesses look at their performance, a colleague plotted these up, and while still not a good picture, it is not as bad as the Q/Q changes.
RE: Economists estimate 5.5 million more layoffs tomorrow - BostonCard - 04-16-2020
I mean, right now the best we have is educated guesses. I think things will look bad in Q1 and, especially, in Q2. Things will probably start to get better once the worst of the pandemic is past us and we feel comfortable with returning to normal life. In that case, there should be a bounceback in Q3 and Q4, at which point the big question is how much we irreversible damage has been done, which to me is the most important question.
BC
RE: Economists estimate 5.5 million more layoffs tomorrow - Mick - 04-16-2020
(04-16-2020, 01:06 PM)BostonCard Wrote: I mean, right now the best we have is educated guesses. I think things will look bad in Q1 and, especially, in Q2. Things will probably start to get better once the worst of the pandemic is past us and we feel comfortable with returning to normal life. In that case, there should be a bounceback in Q3 and Q4, at which point the big question is how much we irreversible damage has been done, which to me is the most important question.
BC
My sense is that we've done a lot of irreversible damage. I think the "demand" part of the equation has virtually evaporated outside of essential services. The longer this goes on, the tougher it will be to come back.
IMF: 2009 global GCP contraction was -1/10th of one percent. 2020 will be a 3.0% drop.
Goldman Sachs: 11% GDP contraction Q2 of this year compared with last year, that's the actual quarterly drop, not an annualized figure. BTW, GS thought unemployment would go to 9% max. Now they say 15%. It's actually 17%, if those seeking unemployment don't get rehired.
Bloomberg says worst drop in post-WWII history.
RE: Economists estimate 5.5 million more layoffs tomorrow - magnus - 04-16-2020
(04-16-2020, 01:06 PM)BostonCard Wrote: I mean, right now the best we have is educated guesses. I think things will look bad in Q1 and, especially, in Q2. Things will probably start to get better once the worst of the pandemic is past us and we feel comfortable with returning to normal life. In that case, there should be a bounceback in Q3 and Q4, at which point the big question is how much we irreversible damage has been done, which to me is the most important question.I hope that we can recover that quickly. It's hard to imagine NYC being anywhere near close to normal in Q3 and it's hard to imagine schools opening like normal in the fall/late summer, especially in the states where aggressive measures were taken early.
BC
Then again, things can change fast in 4-5 weeks let alone 4-5 months.
RE: Economists estimate 5.5 million more layoffs tomorrow - Snorlax94 - 04-16-2020
I’m actually hopeful that much of the economy can rebound by Q3.
It depends on the sector — some will be fine, others will be devastated.
AMC theatres may go bankrupt. Restaurants that are the most reliant on high turnover of large groups of people may struggle the most (especially if family-style, like Buca di Beppo). I don’t see why manufacturing won’t be back by Fall — it’s not like the virus decreases our stock of Capital, like factories or machinery. Large events like travel, concerts, conferences, and in-person sports attendance events may be closed for at least a year. Sales of items with a long sales cycle, like selling large enterprise software systems, will on average take a hit because of the uncertainty.
But I actually could see some restaurants, small entertainment venues, and domestic travel doing better than expected. Folks on the Cardboard are generally an informed, cautious bunch, but if the cfr for people under 40 ends up below .1%, I think a lot of people will resume going out.
One way I think the US is in a uniquely weak position is that a high percentage of the US workforce work in service industries and/or small businesses, both of which will on average be hit harder. Weirdly, I think China’s economy which is more manufacturing-based will be in a stronger position.
But overall, I think things can be OK by fall, averaged across all sectors, assuming we don’t royally botch things up, which may be the case. I am more optimistic the CA economy will be doing OK on average by fall, and sectors that are doing well (tech, groceries, delivery) should help out the hardest-hit sectors, which may occur via a more generous safety net now and higher taxes later.
RE: Economists estimate 5.5 million more layoffs tomorrow - 82lsju - 04-17-2020
page 12 of this document shows the relationship of the recent quarter on quarter GDP forecast translated to the more easy to understand (at least for me) year over year impact
https://www.kpmg.us/content/dam/global/pdfs/2020/CoronaVirus_04_01_20_MiniChartBook_Final2.pdf
RE: Economists estimate 5.5 million more layoffs tomorrow - BostonCard - 04-17-2020
(04-16-2020, 02:16 PM)Snorlax94 Wrote: One way I think the US is in a uniquely weak position is that a high percentage of the US workforce work in service industries and/or small businesses, both of which will on average be hit harder. Weirdly, I think China’s economy which is more manufacturing-based will be in a stronger position.
Well, they will need people to buy the goods they manufacture. So not only are they going to have problems with exports, they may have issues with domestic consumption going down as well, particularly discretionary spending.
But I agree with you that Q3 may not be quite so bad as feared. Yes, it will be way down compared to Q3 2019, but it might be show quarter on quarter growth, especially if orders for sheltering in place start getting lifted and some companies that furloughed their employees start bringing them back.
BC
RE: Economists estimate 5.5 million more layoffs tomorrow - cardcrimson - 04-17-2020
(04-17-2020, 07:23 PM)BostonCard Wrote:(04-16-2020, 02:16 PM)Snorlax94 Wrote: One way I think the US is in a uniquely weak position is that a high percentage of the US workforce work in service industries and/or small businesses, both of which will on average be hit harder. Weirdly, I think China’s economy which is more manufacturing-based will be in a stronger position.
Well, they will need people to buy the goods they manufacture. So not only are they going to have problems with exports, they may have issues with domestic consumption going down as well, particularly discretionary spending.
But I agree with you that Q3 may not be quite so bad as feared. Yes, it will be way down compared to Q3 2019, but it might be show quarter on quarter growth, especially if orders for sheltering in place start getting lifted and some companies that furloughed their employees start bringing them back.
BC
Snorlax is correct. We've sold ourselves to the devil, and in many ways over the last 20 years, turned a blind eye to, shall we say, an unfair playing field enhanced by CCP government support. Time to pay the piper.
RE: Economists estimate 5.5 million more layoffs tomorrow - Genuine Realist - 04-17-2020
(04-17-2020, 07:23 PM)BostonCard Wrote:The issue, I think, is not so much 'rebound', but reformulation - how fast the service industries can reformulate the manner in which they deliver services. For example, I think we are going to see fewer grocery clerks, and more delivery services. (Self-check out was cutting into clerk's jobs anyway.) How the cinema works I don't know, but I am going to go back to the movies.(04-16-2020, 02:16 PM)Snorlax94 Wrote: One way I think the US is in a uniquely weak position is that a high percentage of the US workforce work in service industries and/or small businesses, both of which will on average be hit harder. Weirdly, I think China’s economy which is more manufacturing-based will be in a stronger position.
Well, they will need people to buy the goods they manufacture. So not only are they going to have problems with exports, they may have issues with domestic consumption going down as well, particularly discretionary spending.
But I agree with you that Q3 may not be quite so bad as feared. Yes, it will be way down compared to Q3 2019, but it might be show quarter on quarter growth, especially if orders for sheltering in place start getting lifted and some companies that furloughed their employees start bringing them back.
BC
How all this works I don't know. But there are a ton of people who want to go out to dinner, and a ton of restaurateurs who want to provide the service. I trust the ingenuity of the American public in these matters.
RE: Economists estimate 5.5 million more layoffs tomorrow - chrisk - 04-17-2020
(04-17-2020, 08:20 PM)Genuine Realist Wrote:(04-17-2020, 07:23 PM)BostonCard Wrote:The issue, I think, is not so much 'rebound', but reformulation - how fast the service industries can reformulate the manner in which they deliver services. For example, I think we are going to see fewer grocery clerks, and more delivery services. (Self-check out was cutting into clerk's jobs anyway.) How the cinema works I don't know, but I am going to go back to the movies.(04-16-2020, 02:16 PM)Snorlax94 Wrote: One way I think the US is in a uniquely weak position is that a high percentage of the US workforce work in service industries and/or small businesses, both of which will on average be hit harder. Weirdly, I think China’s economy which is more manufacturing-based will be in a stronger position.
Well, they will need people to buy the goods they manufacture. So not only are they going to have problems with exports, they may have issues with domestic consumption going down as well, particularly discretionary spending.
But I agree with you that Q3 may not be quite so bad as feared. Yes, it will be way down compared to Q3 2019, but it might be show quarter on quarter growth, especially if orders for sheltering in place start getting lifted and some companies that furloughed their employees start bringing them back.
BC
How all this works I don't know. But there are a ton of people who want to go out to dinner, and a ton of restaurateurs who want to provide the service. I trust the ingenuity of the American public in these matters.
Landlords will lose restaurants as tenants unless they reduce rents to reflect the new economics of restaurants. Commercial rents took a big dive in the 2007-2009 recession.
Landlords may be wiser to keep a tenant with a 25% rent cut rather than creating a vacancy that will be hard to fill for years.
RE: Economists estimate 5.5 million more layoffs tomorrow - 2006alum - 04-20-2020
These kinds of stories make me so angry. As a nation, we have so horribly dropped the ball...
Quote:Colorado — like most states and territories across the country — is experiencing record unemployment numbers. But the state’s unemployment system is built on aging software running on a decades-old coding language known as COBOL. Over the years, COBOL programmers have aged out of the workforce, forcing states to scramble for fluent coders in times of national crisis.
A survey by The Verge found that at least 12 states still use COBOL in some capacity in their unemployment systems. Alaska, Connecticut, California, Iowa, Kansas, and Rhode Island all run on the aging language. According to a spokesperson from the Colorado Department of Labor and Employment, the state was actually only a month or two away from “migrating into a new environment and away from COBOL,” before the COVID-19 pandemic hit.
As the pandemic has millions out of work, these systems have become a barrier for the recently unemployed. The federal labor department reported 16.8 million unemployment claims were filed between March 15th and April 4th. That’s approximately 13 percent of the US’s workforce, outstripping even the height of the 2008 financial crash, where unemployment topped off at around 10 percent. As more stores and businesses shutter as a result of the pandemic, the US’s unemployment systems are experiencing an unprecedented amount of traffic and requests — and states don’t have the resources to maintain them.
Let me see if I have this straight: once someone loses their job (due to no fault of their own -- in a pandemic), they also lose their health insurance (pretty necessary in a pandemic), and if they live in one of the 12 states that are programmed in the computer equivalent of espiranto, they may have to wait weeks to months to receive a fraction of their former income. And because they're looking for work in an instant great depression (again, thanks to the pandemic), all they get to tide them over is $1,200 (if they're lucky).
Meanwhile, Ivy League universities with a collective endowment north of $200 billion have already received $44 million+?
[tweet]https://twitter.com/schlaf/status/1250931948555513862?s=20[/tweet]
RE: Economists estimate 5.5 million more layoffs tomorrow - Mick - 04-22-2020
(04-20-2020, 10:43 PM)2006alum Wrote: Meanwhile, Ivy League universities with a collective endowment north of $200 billion have already received $44 million+?
[tweet]https://twitter.com/schlaf/status/1250931948555513862?s=20[/tweet]
Not only that, but Harvard refuses to give back the $8.6 million they were awarded. Edit: After pressure, $41 billion-in-endowment Harvard agreed to return the money.
https://www.cbsnews.com/news/harvard-university-endowment-donald-trump-coronavirus-relief/
RE: Economists estimate 5.5 million more layoffs tomorrow - JJJ - 04-22-2020
This was probably posted elsewhere that I haven't yet checked, but Stanford is returning funds.
https://news.stanford.edu/2020/04/22/stanford-university-statement-relief-funds-cares-act/