May 14, 2020: U.S. Economy Clobbered by Coronavirus Spread

 

5/14/20: If it isn’t bad enough that Americans are drinking bleach because the president said it might work (see: 5/12/20), the nation has massive economic damage it must overcome. On May 14 we learned that another 2,981,000 Americans filed for unemployment. 

 

A permanent loss of as many as 7,292,800 jobs. 

In just eight weeks, 36,464,000 men and women have been laid off from work. The good news (if any) is that in one recent poll 80% said they expected to be called back as the economy reopens. The bad news? Twenty percent of 36,464,000 not getting called back would mean a permanent loss of 7,292,800 jobs. Even those whose jobs are safe may have lost income. Many have accepted salary cuts. Hours have been curtailed. Business has been lost. Officially, the Bureau of Labor Statistics revised numbers for March, indicating that 870,000 jobs had been cut. That meant March 2020 was worse than the worst months during the Great Recession. Then came April and 20,500,000 jobs were knocked out. 

We’re off to a rugged start in May, as well.

Not all rocket ships actually launch.

 

The president has been busy predicting that the U.S. economy will come roaring back – will soar like “a rocket ship” later this year. That appears increasingly unlikely. Fed chairman Jay Powell warned Wednesday that there could be “lasting” damage as a result of the outbreak and we could be in for a lengthy recession. 

The danger signs are many: 

BMW said it expects the auto industry to be held back “for quite some time to come.” 

Rail traffic in the U.S. declined 22.1% in the week ending May 9. 

Jobs in the clean energy field are down 17% since the start of the pandemic, with 594,300 workers idled. That despite the fact that this year renewables are expected to surpass coal for the first time in percentage of electricity generated in the United States. 

Battered by a near-total shutdown of air travel, United Airlines told workers they should consider “voluntary separation” from the company, as United prepares to “right-size” its workforce. 

AirBnB has seen its rental business implode. Executive salaries have been halved. The company will cancel $800 million in advertising for this year. Add that dent to the economy.

 

A study warns that as many as 100,000 small businesses in this country may have closed for good. 

White collar jobs are also being flushed down the toilet, many of them likely for good. Hyatt Hotels announced it was restructuring and would cut 1,300 corporate employees. 

States battered by falling tax revenues may have to lay off 275,000 teachers, adding another dent to a battered U.S. economy. Police and firefighters are likely to feel the axe too. 

Another grim warning: half of college graduates may finish schooling just in time to end up unemployed. 

Major League baseball is talking about an 82-game schedule, starting in July, without fans in stadiums. Everyone involved will have to take salary cuts to make the system work. 

Maersk, which handles one-fifth of all cargo shipped by sea, predicts a global decrease in the second quarter of 20-25%.

 

Indicative of how deep the damage has been, 1.4 million healthcare workers lost jobs in April, which would seem impossible right now. The American Hospital Association says member institutions have lost $200 billion as elective surgical procedures have been delayed. Primary care physicians are reporting huge losses. Patients are staying home rather than go to a doctor’s office with sore throats or for annual checkups, fearful they could end up in waiting rooms, seated next to someone infected with COVID-19. 

Millions of other Americans have lost both jobs and health insurance. They won’t go to the doctor unless a foot falls off or they get run over by a tractor.