There is no doubt that we’re all living difficult times. Uncertainty and insecurity have been a constant in our lives, and while the situation is getting worse to millions of Americans, the stock market has been hitting record highs and it seems to be still profiting during this storm. Every week, we have been reporting how the unemployment rates are sky-rocketing, but this time we’re going to be graphical about it, with updated data for you to clearly understand the dimension of this downfall.
Our goal here is not to make you lose your expectations about recovering from this crash, but to give you a realistic perception of the situation. We want to report you what the mainstream media is failing to share, whether because they want to give their version of the truth or because they’re hiding the real numbers and projections. The main point is to question ourselves: “why with over 30 million job losses and a crash in our economy, the Wall Street is still managing to ascend through a crisis that is literally tearing people’s lives?” or, in a shorter note: “to whom this crisis was created for?”
The Fed has injected trillions in asset and bond purchasing, to “soften the blow” for corporations and well-off segments of the economy, while hundreds of thousands of citizens weren’t able to get their unemployment benefits yet. The thing is – when we talk about millions of people out of their job posts relying on governmental aid to survive, we can’t imagine the real proportion of this and how damaging it is going to be for our economy.
That’s why we’re going to try to show you the numbers for different sectors of our economy, so that you can understand how each sector will ultimately interfere with one another. This is a bubble of unemployment, and differently from an inflation bubble that is going to be bought and rescued by the debt-junkie called the Federal Reserve, we’re going be left to fend for ourselves.
To begin with, in April, the US had the biggest drop in job losses rates in history: 10 times bigger than the record-high on the peak of the Great Depression. Back then, 2 million jobs were lost at its highest point. Last month, 20.5 million people have filed for unemployment.
However, tens of thousands of Americans weren’t able to file for it yet. So the numbers that were shown to us, don’t cover the real amount of jobs that were lost. Actually, according to a prominent economy firm, the released data is based on a criterion that excludes many workers, that were tagged as “temporarily laid off” or “absent from work due to other reasons”. A little too ambiguous, don’t you think?
Therefore, the real number is estimated to be 5% higher than reported, marking a 20% rate. As ironic as fate can be, how could we ever predict such a sudden reduction, considering that last February, America had hit a 50-year low of 3.5% on its unemployment rate, and the month after that, it climbed to 10.3%. And by the end of the same month, 14.7% of the population were out of the job market?
In February, the change in total nonfarm payroll employment was reviewed down by 45,000, from +275,000 to +230,000, and the shift happened in March was revised down by 169,000, from -701,000 to -870,000. The number of ‘self-reported’ workers on temporary lay-off has climbed 10 times more, to 18.1 million in April. These workers believe to get their jobs back within 6 months after the suspension of the lockdown. Permanent job losses increased from 544,000 to 2 million.
While many assume the US economy would bounce back to where it was before the global outbreak, so they could just come back from where they were left off, and turn the page to end this chapter, J.P. Morgan Chief Investment Officer, Bob Michele, had told Bloomberg that it might take 10-12 years after the sanitary crisis is over to recover the US employment levels to its previous rates, disclaiming that it won’t be as simple as turning the economy back on.
At the same time, as the unemployment rates are extending, consequently, the labor force participation rates are shrinking dramatically to a 50-year low, from 3% to 60.2%. Strangely enough, BLS had reported that the average hourly earnings, in March, increased by 7.9%, justifying that hours worked tumbled by 15%, while pay dropped by “only” 8%, which means that the average hourly wages – a function of total pay and hours worked – had actually risen. But economists had quickly asserted this number was inflated by disproportionate job losses among the lower-wage workers.
On a deeper analysis, the Hispanic community had the biggest rate of laid-off workers, with 18.9%, followed by the African-American community, with 16.7%, 14.5% for the Asian group, and 14.2% for Caucasians. The rate among teenage workers hit 31.9%, 15.5% for adult women, and 13% for adult males.
Last month, two-thirds of the unemployment rates were filed, with an increase within 5 weeks from 10.7 million to 14.3 million. The number of unemployed workers, jobless 5 to 14 weeks, grown by 5.2 million to 7.0 million, as the number of long-term unemployed workers, jobless for at least 27 weeks, at 939,000, declined by 225,000 over the month and represented 4.1% of the unemployed.
According to a recent household survey, total employment was reduced from 22.4 million to 133.4 million, the employment-population ratio, at 51.3 percent, decreased by 8.7 percentage points over the month, flagging the lowest rate and largest over-the-month decline in history.
The number of full-time workers had contracted by 15 million in April, while part-time workers diminished by 7.4 million, representing one-third of the over-the-month employment decline. On the other hand, the number of employees who were forced to shift from full-time to part-time, due to changes in their work arrangements, nearly doubled over the month to 10.9 million.
If we take a look at the big-picture and analyze the composition of these job losses, the rank of sectors that were hit the hardest starts with leisure and hospitality payrolls with a -7,653,000 loss, next to retail trade with -2,106,900, followed by professional and business services: -2,128,000, then health care and social assistance: -2,086,900, manufacturing: -1,330,000, construction: -975,000, information: -254,000, financial activities: -262,000, and transportation and warehousing hitting -584,100 workers.
In addition to this examination, there are many more details to investigate how these sectors were affected. For instance, the fact that in April, employment in leisure and hospitality plummeted by 7.7 million jobless workers, setting a 47% rate. Approximately three-quarters of this drop occurred in food services and drinking places, -5.5 million, while employment also collapsed in the arts, entertainment, and recreation industry by -1.3 million losses, and -839,000 in the accommodation industry.
In the same month, education and health services employment declined by 2.5 million. With a 1.4 million decrease in health care employment, led by losses in offices of dentists of -503,000 workers, along with a -243,000 loss in physicians offices, and other health care practitioners had marked -205,000. Social assistance employment also declined by -651,000, representing a -336,000 loss in child daycare services, and -241,000 for individual and family services. Also, private education employment had shrunk by -457,000 over the month.
On another note, professional and business services spotted a 2.1 million job loss. Temporary help services had sharp losses of -842,000 employees, and services to buildings and dwellings signaled that 259,000 were let go.
In retail trade, employment declined by 2.1 million. With clothing and clothing accessories stores losing -740,000 of their workers, while job losses for motor vehicle and parts dealers marked -345,000, miscellaneous store retailers: -264,000, and furniture and home furnishings stores hitting -209,000. In turn, the component of general merchandise stores that includes warehouse clubs and supercenters gained 93,000 jobs.
Over and above, the manufacturing sector had a 1.3 million drop, with roughly two-thirds of the decline in durable goods manufacturing, setting a -914,000 fall, motor vehicles and parts segment had -382,000 of their employees cut, and fabricated metal products had about -109,000. Nondurable goods manufacturing index of lost jobs was of -416,000.
Other services of the industry had a decline of 1.3 million in April, where two-thirds of the decline happened in personal and laundry services, almost -797,000. For their part, government employment plunged by 980,000, with employment in local government down by 801,000, mostly expressing the effects in school closures, setting a decline in state government education of -176,000.
Notwithstanding, construction employment had a fall of 975,000, mainly in specialty trade contractors, with -691,000 job losses, as in the construction of buildings the damage was of -206,000 workers less. Transportation and warehousing fell by -584,000, pointing a respective loss of 185,000 in transit and ground passenger transportation, and 141,000 for air transportation.
April has also seen 363,000 jobs gone in wholesale trade, in both durable and nondurable goods segments. Moreover, financial activities losses reflected 262,000 over the month, for the most part, occurring in real estate and rental and leasing (-222,000).
In the same way, the information sector fell by 254,000, led by a reduction in motion picture and sound recording industries of -217,000 workers. Whereas, mining losses were of 46,000, with the biggest drop of -33,000 in support activities for mining.
With all this data, you can actually see what a 33.5 million job-loss-scenario looks like. It’s not just a number, it’s millions of lives that have been affected, millions of careers that were compromised, life goals and professional achievements completely put away. Within 7 weeks, the US job market was turned upside down, leaving all these people hanging, that outstands the massive statistic America had last witnessed during the Great Depression.
We’re facing a weekly downturn of millions of jobs, and as maintained by the chief economist at Pantheon Macroeconomics, Ian Shepherdson, this situation will be extended until the middle of June. Only after that, the weekly filing of new claims for unemployment benefits will fall below the million mark, and if we compare it with the all-time record – prior to this crisis – of 695,000 in unemployment files in a single week, it is clear that there will not have an easy way out of this economic depression.
On top of all this, the measures that were developed by the Congress had created a serious incentive for people to stay unemployed. Partly, because many workers are now bringing much more money to their households than they could ever do it before to provide for their families. But mostly, because business owners were encouraged by this action to lay off their employees once they’re going to be covered financially by the government while the economy is shutdown.
This aid is actually overloading the government with debt, so the private sector is once again free of their social duties to contribute with balancing the economy. As we said before, this debt is likely to be purchased by the Fed with money that doesn’t really exist. They’re going to print more money to pay for this debt, leading to an unprecedented hyperinflation.
Meanwhile, the ones that are profiting during this entire situation are going to take the opportunity to swallow smaller companies into their already large corporations, so they can increase their power even more and set a bigger dominance in the market. So, being honest with all of you, our valued viewers, this crisis is not a crisis for everyone, as it is an opportunity to some to suck up, even more, our lives through a modern version of our work system, also know as a disguised form of slavery. Be aware.