Over the past 7 weeks, initial claims have settled into a negative 14.1% weekly growth rate (as seen in the exponential decay trend in red on the chart). Should the trend continue, there will be an additional 9.8 million cumulative initial claims over the next 10 weeks. At that time, initial claims will mostly be back to normal. Speaking of normal...
In normal times, 10 million claims in just 10 weeks would be considered very bad news. Good thing these aren’t normal times. What’s 10 million more when we’ve already seen 40+ million in the previous 10 weeks?
How many of these jobs will actually return? And of those that do, how long will it take? Stay tuned.
The illusion of prosperity is alive and well. Thanks for asking. Sigh.
Source Data:
St. Louis Fed: Initial Claims
The economy is not a light switch. People who have been scared half to death about Covid-19 and who hear that the economy is going straight to hell due to lockdown change their outlook, and therefore their spending. When lockdown measures are removed, people do not snap back to the old ways. I'd say half of those jobs are not coming back. Hard to see much recovery for airplane manufacturers, airlines, rental car companies, car manufacturers, hotels, Uber/Lyft, AirBnb, sit-down restaurants, etc. This will have ripple effects on the rest of the economy.
ReplyDeleteI'm sure somebody next year will be telling us that the only thing we have to fear is fear itself.
Who Struck John,
ReplyDeleteThe economy is not a light switch.
I'm sure somebody next year will be telling us that the only thing we have to fear is fear itself.
I’ve seen this movie.
Scanners (1981)
Programmer: There’s no need for that. It’s all very quiet. It’s just internal switching.
Braedon Keller: No one’s ever switched off a scanner before.
Programmer: See? I told you. No fireworks.
*** FIREWORKS ***
https://fred.stlouisfed.org/graph/?g=uw3S
ReplyDelete^ Number of years until everyone is let go.
https://fred.stlouisfed.org/graph/?g=uw4C
ReplyDeleteUS economy had *just* made it back to 1990-00 full employment this year, too.