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10 Signs the
U.S. Is Heading for a Depression
By Mike
Whitney
1–
Unemployment is
off-the-charts
April 04, 2020
"Information
Clearing House"
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Thursday’s
jobless claims leave no doubt that the country is in
the grips of another severe recession. More than 6.6
million Americans filed for unemployment insurance
in the last week. That number exceeds the gloomiest
prediction of more than 40 economists and pushes the
two-week total to an eye-watering 10 million claims.
According to
CNBC:
“Those at
the lower end of the wage scale have been
especially hard-hit during a crisis that has
seen businesses either cut staff outright or at
best freeze any new hiring until there’s more
visibility about how efforts to contain the
coronavirus will work.
“We’ve
lived through the recession and 9/11. What we’re
seeing with this decline is actually worse than
both of those events,” said Irina Novoselsky,
CEO of online jobs marketplace CareerBuilder.”
(CNBC)
According to
New York Magazine:
“Economists at the
Federal Reserve Bank of St. Louis
projected Monday
that job losses from the coronavirus recession
would reach 47 million and push America’s
unemployment rate to 32.1 percent — more than 7
points higher than its Great Depression–era
peak.”
2– Service
Sector has been walloped by the virus
Services account for 70% of the US economy, but
presently the sector is in meltdown.
According to the analysts at Wolf Street:
“Employment contracted sharply and hours were
reduced for those still employed. “The
employment index plunged from +6.1 to -23.8,
also the lowest level on record…
Retailers
got whacked. The Retail Sales Index of the Texas
Retail Outlook Survey collapsed from the already
beaten-down level of -2.5 in February to an epic
all-time low of -82.6 in March… (Also) the
general business activity index collapsed from
the beaten down level of -5.0 to a historic low
of -84.2….
Comments from
retail executives were somber:… “Most of our
business has gone to zero except for
essential locations such as hospitals, military
bases and prisons… We are contemplating at
this moment sending most employees home while
our owners determine whether they can afford to
pay reduced salaries and cover benefits for a
short period while we see if things improve or
worsen” (Wolf
Street)
3–
Economic carnage extends
across sectors
Business
Insider: “Recession risks are rising as
coronavirus spreads around the world…The crisis
will clobber airlines, shipping, hotels, and
restaurants…
“Sectors
reliant on trade and the free movement of people
are most exposed,” said Benjamin Nelson, a
Moody’s vice president and co-author of the
report.
Carmakers,
gaming, and retail will be hit hard by supply
chain disruptions, the analysts said…
“A lengthy outbreak would affect economic
activity for longer, leading to heightened
recessionary dynamics and a more significant
demand shock,” Moody’s said. “A sustained
pullback in consumption would hurt corporate
earnings, prompt layoffs, and weigh on consumer
sentiment.”
(Business
Insider)
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