In all of U.S. history, we have never seen a spike in unemployment like we are witnessing right now. Last Thursday it was announced that more than 3.2 million Americans had filed new claims for unemployment benefits during the previous week, and many believe that the number that will be announced this Thursday will be even larger. By the way, the previous all-time record for a single week was just 695,000. So what is happening right now is absolutely nuts. 49 percent of U.S. companies anticipate conducting layoffs within the next 3 months, and the St. Louis Fed is projecting that the unemployment rate in this country will soon rise to 32 percent. Before the coronavirus pandemic started shutting virtually everything down, approximately 158 million Americans were employed, and so we could soon have tens of millions of unemployed workers on our hands if the St. Louis Fed’s projection is accurate.
How are we possibly going to take care of them all?
To call this a “tsunami of unemployment” would be a massive understatement. According to California Governor Gavin Newsom, more than 1.6 million residents of his state have filed for unemployment in recent weeks…
It took the coronavirus pandemic less than a month to triple California’s unemployment rolls and plunge the state’s economy into a tailspin comparable to the Great Recession.
Gov. Gavin Newsom, in his daily update on the fight against COVID-19 on Tuesday, said “well over 1.6 million Californians” have filed for unemployment. A record 150,000 Californians filed claims Monday alone, he said.
Over on the east coast, New York Governor Andrew Cuomo is claiming that there are times when “hundreds of thousands of people” are trying to access his state’s unemployment website simultaneously…
New Yorkers are struggling to file claims for unemployment benefits, as applications have inundated the state’s Department of Labor. At a news conference Tuesday, Gov. Andrew Cuomo, a Democrat, acknowledged the state is having problems processing claims.“I apologize for the pain—it must be infuriating to deal with,” he said. “The site is so deluged that it keeps crashing because you literally have hundreds of thousands of people at any time trying to get on the site.”
Meanwhile, more Americans are losing their jobs with each passing day. In fact, a brand new survey just discovered that 28 percent of Americans have already “lost wages or other personal income” during this crisis…
Economists surveyed by Bloomberg estimate a Labor Department report Thursday morning will show 3.5 million Americans filed initial applications for unemployment insurance last week, up from the record 3.3 million who sought benefits the prior week.
Some economists expect a far bigger total. Nomura forecasts 4.1 million; Morgan Stanley, 4.5 million; and Bank of America, 5.5 million. Such first-time jobless claims represent the best measure of layoffs across the country.
But even if every “shelter-in-place” order was immediately lifted all across America, a large portion of the population would still be deathly afraid of the coronavirus and economic activity would still be greatly depressed from previous levels.
Everyone needs to understand that the unsustainable debt-fueled prosperity that we were enjoying is not coming back, and our day of reckoning has finally arrived.
The “everything bubble” has finally burst, and Egon von Greyerz is warning that we are heading straight into “a collapse”…
As the bubble continued to grow for over ten years since the 2006-9 crisis, very few understood that the last crisis was just a rehearsal with none of the underlying problems resolved. By printing and lending $140 trillion since 2006, the problem and risks weren’t just kicked down the road but made exponentially greater.
So here we are in the spring of 2020 with debts, unfunded liabilities and derivatives of around $2.5 quadrillion. This is a sum that is impossible to fathom but if we say that it is almost 30x global GDP, it gives us an idea what the world and central banks will have to grapple with in the next few years.
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