[Farm93]

Initial jobless claims worse than forecast for second straight week.  Ongoing claims declined to a mere 19.5 million.

https://www.ttnews.com/articles/us-initi...econd-week

We are likely hitting a second phase of unemployment.   These are places that didn't really anticipate their businesses would be directly impacted by shelter-in-place, but do expect to be impacted significantly by a soft economy if COVID is slows things for 12 or more months.

Much like a stone in a puddle the COVID impact ripple should diminish as it spreads, but my general sense has been that secondary and tertiary impacts are not fully included in unemployment claims yet.    I suspect these are the business sectors President Trump hopes will avoid layoffs until mid-November by consistently talking about the virus going away soon and/or a vaccine coming before end of year.

Frugal companies probably are beginning layoffs banking on the idea that if a miracle upswing does happen in 6-9 months there will be plenty of available workers should workforce expansion be required.

The key variable in the mix is control over COVID.   As long as the underlying COVID health crisis dominates the rational economy choices by consumers and businesses will continue to slow the economy.   Nearly free money (Congress) and cheap loans (Fed) can only do so much if everyone remains fixated on ever growing COVID death count.

The USA's COVID peer group appears to be Sweden, Mexico, Brazil and the UK.   The countries in this group are likely to become increasing isolated by the rest of the world because of their COVID cases.   And that global isolation probably would compound the economic challenges.  

I really wish the USA was in the peer group with Germany, South Korea, and Australia, but at this point the best economic move is to assume the USA will not be in that club.   Bring on more layoffs.   :(

[Farm93]

Initial jobless claims worse than forecast for second straight week.  Ongoing claims declined to a mere 19.5 million.

https://www.ttnews.com/articles/us-initi...econd-week

We are likely hitting a second phase of unemployment.   These are places that didn't really anticipate their businesses would be directly impacted by shelter-in-place, but do expect to be impacted significantly by a soft economy if COVID is slows things for 12 or more months.

Much like a stone in a puddle the COVID impact ripple should diminish as it spreads, but my general sense has been that secondary and tertiary impacts are not fully included in unemployment claims yet.    I suspect these are the business sectors President Trump hopes will avoid layoffs until mid-November by consistently talking about the virus going away soon and/or a vaccine coming before end of year.

Frugal companies probably are beginning layoffs banking on the idea that if a miracle upswing does happen in 6-9 months there will be plenty of available workers should workforce expansion be required.

The key variable in the mix is control over COVID.   As long as the underlying COVID health crisis dominates the rational economy choices by consumers and businesses will continue to slow the economy.   Nearly free money (Congress) and cheap loans (Fed) can only do so much if everyone remains fixated on ever growing COVID death count.

The USA's COVID peer group appears to be Sweden, Mexico, Brazil and the UK.   The countries in this group are likely to become increasing isolated by the rest of the world because of their COVID cases.   And that global isolation probably would compound the economic challenges.  

I really wish the USA was in the peer group with Germany, South Korea, and Australia, but at this point the best economic move is to assume the USA will not be in that club.   Bring on more layoffs.   :(