Layoffs Start Turning From Temporary to Permanent Across America

figmentofmyass

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Quote from: btc_angela on May 14, 2020, 08:03:57 AM

I think one sector that has been hardest hit by the pandemic is the informal workers so the bulk of US unemployment come from that sector.

it's definitely not "the bulk" of the labor market, but you're right, it's a huge sector. according to these sources, it represents 20% of the labor market and >10% of the country's GDP.
https://www.stlouisfed.org/on-the-economy/2017/april/informal-labor-market
https://www.mprnews.org/story/2013/04/29/daily-circuit-shadow-economy

that means the real situation is much worse than the official unemployment numbers show, since informal workers aren't usually captured by those stats.

a better metric may be the "U-6" stat, which adds all persons marginally attached to the labor force and those employed part time for economic reasons. in april that was 22.8%, which is basically great depression level unemployment.

Ozero

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Quote from: EdvinZ on May 11, 2020, 03:53:48 AM

I think that with the lifting of the quarantine, the economic situation will gradually improve. Many businesses were not prepared for the epidemic and now their owners should review the mechanics of their businesses. For people laid off because of the epidemic, the American government at least pays monetary compensation, unlike some other countries. Perhaps this is a good chance for some citizens to learn professions for remote work or freelancing.

It is impossible to prepare for such a pandemic in advance. Of course, coronavirus has already caused significant damage to the economies of almost all countries and its consequences cannot be completely eliminated. Many commercial structures will not be able to fully recover. However, there is something good in everything bad. Coronavirus will restructure the work of all markets. Those who are better equipped to work in the new conditions will remain. Coronavirus will also accelerate the transition to digital money and, in general, to digital technology.

btc_angela

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Quote from: alani123 on May 11, 2020, 06:41:31 AM

However, I still see one really big issue. Monetarily, the EU proves to be very dysfunctional... Long story short, but the biggest loser states from coronavirus are left on their own devices for their financial recovery. A little contradictory to having a monetary union.

EU though are very dysfunctional ever before the advent of the pandemic.

I think one sector that has been hardest hit by the pandemic is the informal workers so the bulk of US unemployment come from that sector. So projections for the 2nd quarter is going to be worst, around 14%-17% unemployed and that is a huge numbers. They can offer subsidies, but that will go and stretch for months alone. That those people need are real jobs, and the US economy's recovery are going to be painful and long.

avikz

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Quote from: whyrqa on May 10, 2020, 05:00:08 AM

to one way or another, the US economy will suffer very much from the fact that massive layoffs of people from work. Recently, even large companies such as Boeing have been announcing a massive reduction in the number of their employees. all these people will in any case apply for unemployment benefits. I believe that the US government is faced with a very large problem that will exceed the performance of the well-known Great Recession. there are no real plans to overcome unemployment and enable people to have real livelihoods.

It's not just US, but majority of the other countries as well. We are seeing the same trend even in Europe. My company has fired a lot of people from both US and EU and especially those who are sitting at the top of the chain and the monthly salary is on the higher side. So the entire world is dealing with this problem and not US alone. However, I doubt this situation will be permanent. Because once the market opens up, people will gradually find the employment because businesses will need more people to function. But definitely, the situation will not be same as before overnight, but slowly and gradually things will come back to track.

Majority of the countries are announcing financial packages and loans to the small and medium sized businesses so that they can ramp up their operations as quickly as possible. The world leaders are not donkeys so have a little faith.

Lorence.xD

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The reason that this lay-offs are getting permanent is that the infection chain is getting longer and the people are not following the measures to prevent the further spread of the virus, I am not saying that all of this is the fault of the people, they are the most affected in this pandemic, so they should atleast do their part when it comes to this problem. In my opinion the government should focus on keeping the chances of infections low and welfare of their people, this things should go hand in hand because flattening the curve while making the masses satisfied with the government's help is an achievement.

FanatMonet

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You see, a huge number of countries faced a very difficult choice, either to return to work in order not to destroy the economy, or to extend the quarantine further, but with catastrophic consequences in the economy. I would say that quarantine should be left only for the elderly and people with serious illnesses.

gantez

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I believe the American government to bounce back to normal after this problem and the economy will start up again, people layer off will regain their places of livelihood. The government is likely to open up other means of helping played citizens to survive until something tangible is restored.

sana54210

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That is the sad thing about whats about to happen as well. There will be inflation because there will be money printed but people will use that right away towards companies who will sell them stuff that they need, so people will survive while companies make a profit, while companies get free money too.

So, you get companies earning double at that time whereas people are earning nothing at all. And that means people will start to accept any job they are offered, and the minimum salary is denied to go up as well, it should have a revision right now because we have seen that minimum salary people are the people we needed during this crisis, the hardest workers have been them. So, right now we are going to see people working for less instead, whereas companies get even bigger, so the smaller salaries we get will pay for even less.

alani123

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The amount of unemployment applications is just record breaking and perhaps very telling of whats about to come. The seriousness of the situation, combined with the lack of action from the federal government in the U.S., has lead to increased trust in state/public organizations here in Europe. In spite of a turn to the right in recent years, coronavirus has made it so more people seek state involvement now, appreciating public health and such social measures. And it makes sense to come to this conclusion. Central planning works well for disaster relief and crisis management. The European common tactic of increased state involvement and regulation appears to have held back the worst compared to the U.S..

However, I still see one really big issue. Monetarily, the EU proves to be very dysfunctional... Long story short, but the biggest loser states from coronavirus are left on their own devices for their financial recovery. A little contradictory to having a monetary union.

wxxyrqa

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UN analysts have made disappointing conclusions because, according to their statements, almost 25 million people lose their jobs due to the economic crisis created by the coronavirus pandemic. In addition, due to big problems in business of any direction, people will lose their salaries, which according to research can range from 1 billion to 3.5 billion dollars in unearned salaries. Even assuming what kind of labor market will exist, it will practically turn any person into a slave, since there will be much fewer jobs, and there will be a lot of people at the workplace, and the employer will use this in order to significantly reduce wages fee. this way people will work for nothing.

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Politicians are politicians and they will always paint a rosy picture of the most grim situations to gain favor from the voters. So take whatever they are saying with a pinch of Salt and just use your own logic and observation skills to see what is the truth.

There are currently a global pandemic and a global economic slump, so for them to say everything will magically recover in a few weeks is pure bull$hit. The impact of this pandemic and the quarantine and lock down ramifications will have a long lasting impact on the economy of every country.

I even expect a huge dip in the Bitcoin price, because people will not have the money to invest in high risk investments. Angry

MCobian

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In my opinion it is not only in America that permanent layoffs occur. Almost every country affected by the corona virus experiences the same thing.
This is a world disaster, we are in a time of greater economic crisis than the 2008 economic crisis. Many of the world's population is starving,
therefore this is the time for those who have financial advantages to help people who are financially difficult. Because if only expect help
from the government alone, it will be difficult to solve this problem. It takes cooperation from all parties, I hope the vaccine can be found soon.
So the corona virus can be stopped, then the economy can bounce back again.

exstasie

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Quote from: EdvinZ on May 11, 2020, 03:53:48 AM

I think that with the lifting of the quarantine, the economic situation will gradually improve. Many businesses were not prepared for the epidemic and now their owners should review the mechanics of their businesses. For people laid off because of the epidemic, the American government at least pays monetary compensation, unlike some other countries.

And if they keep printing money to extend unemployment, maybe that band-aid will keep things chugging along. But they probably won't do that forever (the extensions are set to expire in the summer) and the outlook for unemployment is getting pessimistic. Supposedly, 42% of recent layoffs will result in permanent job losses: https://bfi.uchicago.edu/working-paper/covid-19-is-also-a-reallocation-shock/

Government projections don't look much better. The CBO doesn't expect sub-10% unemployment again until the end of 2021: https://www.cbo.gov/publication/56335

It's shaping up to be a rough couple years ahead, all considered.

EdvinZ

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I think that with the lifting of the quarantine, the economic situation will gradually improve. Many businesses were not prepared for the epidemic and now their owners should review the mechanics of their businesses. For people laid off because of the epidemic, the American government at least pays monetary compensation, unlike some other countries. Perhaps this is a good chance for some citizens to learn professions for remote work or freelancing.

freedomgo

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As expected, it would affect the economy since US has a good economy but they are hit hard by the virus.

Trump sometimes is a kind of person who are good in giving assurance but smart people would understand that it's just the way of the government to keep people relax, but in reality, their economy is already struggling, ... this is the time where the government has to make a crucial decision, economy or the health of the people, if they choose the health of the people, they will have to support the people as people can't work and they can only do that if they have a lot of money to support the people, so what are they gonna do, are they going to print money again?

exstasie

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Quote from: gentlemand on May 10, 2020, 05:10:37 AM

Quote from: whyrqa on May 10, 2020, 05:00:08 AM

I believe that the US government is faced with a very large problem that will exceed the performance of the well-known Great Recession.

The UK is heading towards a similar outcome. We're going to have some of the highest death rates, the highest economic damage and be the least welcome in other countries.

The headlines are just staggering: BoE warns UK set to enter worst recession for 300 years

The worst since "the great frost" in 1709. I can't even fathom what the hell that means. Lips sealed

Like the Fed, they've also just committed to unlimited QE: https://www.bloomberg.com/news/articles/2020-05-07/boe-s-bailey-signals-stimulus-ahead-as-officials-urge-more-qe

What an incredible time to live in.

plvbob0070

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It results in this scenario because the government did not take immediate action for this virus to prevent it from wide-spreading across the whole country. They thought it was just a simple virus, and now the situation worsens.

Probably companies are doing this to save their business. They can't operate so they have no revenue, and maybe that's the reason why they are doing it, to avoid giving too many benefits for their workers. Maybe they don't want to take some responsibility to pay their employees that is why they are reducing their workers. But I believe that after this pandemic, businesses will operate again and they will also need more workers. When businesses become stable and were able to earn a profit, I think they will hire some workers again. It may be a permanent layoff for some companies, but workers can still get a job at another company after this pandemic.

gentlemand

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Quote from: whyrqa on May 10, 2020, 05:00:08 AM

I believe that the US government is faced with a very large problem that will exceed the performance of the well-known Great Recession.

The UK is heading towards a similar outcome. We're going to have some of the highest death rates, the highest economic damage and be the least welcome in other countries.

This is the inevitable outcome of refusing to acknowledge the cat is out of the bag until it actually returns and sinks its fangs into your balls. By then it's far too late of course.

However we'll have to wait until it's cured or becomes a fact of life to know who had the best strategy. The places that went in early and went in hard might be looking like champs now but they might also have done nothing beyond offsetting the pain to a point further down the road.

Glad I ain't running any countries.

whyrqa

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to one way or another, the US economy will suffer very much from the fact that massive layoffs of people from work. Recently, even large companies such as Boeing have been announcing a massive reduction in the number of their employees. all these people will in any case apply for unemployment benefits. I believe that the US government is faced with a very large problem that will exceed the performance of the well-known Great Recession. there are no real plans to overcome unemployment and enable people to have real livelihoods.

exstasie

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Quote from: DoublerHunter on May 08, 2020, 11:10:01 AM

^ Well I am not live in America but let me share my opinion, if temporary layoffs will turn into permanent then it will be a disaster to the whole country. I rather have to work with a smaller income than none at all it will not be the resolution for businesses it may only cause the bigger problem to the government for people who will die of starvation.

There's actually a very curious phenomenon happening.

The big stimulus bill passed in March gifted $600/week in unemployment benefits to those laid off because of the pandemic, on top of their normal state unemployment benefits. So now there is a situation where a lot of people are making more money being unemployed than they do at their normal jobs. And now that businesses are reopening, those workers are refusing to come back to work. https://www.foxbusiness.com/money/coronavirus-businesses-struggle-lure-workers-away-unemployment-benefits

Quote from: gentlemand on May 08, 2020, 01:29:45 PM

I don't think there's any way of knowing what economies will look like at this stage. It might surprise us all with a rebound or it might be the beginning of the rout of the millennium.

Yep, the stimulus sure has infused lots of cash into the markets. It has also created lots of perverse incentives that will hurt any recovery, and a whole lot of confusion in the markets.

I have no idea how it will all play out. My original model was the 1987 stock market crash, but that seems way too optimistic now. At the same time, it's hard to bet against something like $10 trillion printed by the Fed and Treasury.

gentlemand

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I don't think there's any way of knowing what economies will look like at this stage. It might surprise us all with a rebound or it might be the beginning of the rout of the millennium.

A lot of elements have been barely staying afloat. You can keep a company in suspended animation but when you wake it up there's a good chance there won't be a market for it to service.

It's always been clear that there's a balance between populations dying vs the economy dying. The way it's been said out loud could do with a little working on.

el kaka22

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I am sure there will be a lot more hiring as well when this is over. Definitely companies are thinking about how they could make some more money, so they realized that there are tens of millions of unemployed people outside and if they fire the currently working people and not hire anyone for a year they could still hire anyone they want a year later and they will definitely still hire some good people because many of them are unemployed. That is why firing people are getting easier and easier, and I am sure the number will increase as well for a little bit more while.

Companies usually do not spend money on stuff as much as they spend on people, when you fire 10 people you are basically making a company go from minus to plus and that is very important to consider when people are fired and think why they were, it is just because of this.

DoublerHunter

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^ Well I am not live in America but let me share my opinion, if temporary layoffs will turn into permanent then it will be a disaster to the whole country. I rather have to work with a smaller income than none at all it will not be the resolution for businesses it may only cause the bigger problem to the government for people who will die of starvation. If the government can support all the citizens who permanently lose their job which I know not but it will become another burden for them might as well they should find another way not to let permanent layoffs happen.

Juggy777

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Quote from: avikz on May 07, 2020, 01:21:09 PM

Quote

Is it time to stop pushing this "everything will blow over by summer" narrative yet?

Trump's tone has changed quite a bit. Now the message is "more people are definitely going to die, but the economy is more important." That tells me the underlying economic situation is pretty dire.

I don't believe reopening is going to bring a miraculous economic recovery. Surveys show a strong majority are in favor of the shutdowns and are more concerned about the epidemic than the economy. That (combined with high unemployment) probably means we can expect very weak consumer spending going forward. The Trump administration is in for a rude awakening when that becomes more obvious.

Surveys will definitely show that people are in favor of lockdown in US. Because, unlike any other countries, US citizens are getting a monthly help of $1200 every month. So, their basic needs a definitely being taken care by the government. So they are not feeling that pinch to survive. Even though US government is printing money to cover that expense, still the citizens are in good shape financially. Now that the basic needs are taken care, economy is the area of priority for Trump.

Reopening may not solve the issue overnight, but that's the best bet that Trump has in his kitty. Unless and until people spend their money, the economy is not going to take a U-turn. Majority of the countries are facing similar issues and re-opening may solve this unemployment issue to some extent. Full-fledged impact can only be seen once the situation normalizes but it is very unlikely for another 2-3 months.

@avikz you’re absolutely correct as US citizens are indeed getting paid to sit at home, but how can we blame them for choosing to protect their own lives over protecting their country’s economy?, because under similar situations we too would have chosen to protect our own lives rather than work and save our country’s economy.

In my personal opinion Trump should partially open up work places across US as that’ll help money circulate across the country which in turn will boost the economy, and then slowly when things begin to improve then he can completely restart each and every workplace in US.

While many people may not understand the importance of saving US economy right now, but these same people will question him later as to why he didn’t save the economy sooner because covid effect will pass, but a broken economy will take years to fix and it’s effect will be much worse hence I support his call to save US economy. However I don’t want to see anyone die in order to save US economy, and that’s where I’m hoping that he can make a plan where he can save life’s and US economy too.

Sources:

https://www.marketwatch.com/story/will-you-receive-a-direct-payment-from-2-trillion-bill-passed-by-senate-wednesday-depends-on-how-much-you-earn-2020-03-26

https://ohsonline.com/articles/2020/05/05/which-states-are-opening-and-which-are-not-this-week.aspx

https://foreignpolicy.com/2020/04/09/unemployment-coronavirus-pandemic-normal-economy-is-never-coming-back/

https://www.theguardian.com/commentisfree/2020/may/03/donald-trump-reopen-us-economy-lethal-robert-reich

Lizzylove1

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I certainly would have preferred companies come up with pay cuts than laying off large numbers of staff. These ones will have to rely on government monthly package for a developed and rich nations while developing and underdeveloped poor nations whom are affected will just be dehumanized when they can't figure out what to do sustain livelihood. I hope people don't start taking to suicide.

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Quote from: The Sceptical Chymist on May 07, 2020, 09:16:32 AM

Reopening businesses won't be a panacea for the economy, but it will help.

One thing that we know for sure is that opening will help and that keeping it shut down is not the solution.
From the start, all of us knew it, sooner or later no matter how many deaths are still happening every day you will have to re-open and let the people care for themselves to not get infected.
Some won't be able to, some will get sick, it's tragic, it's unfortunate and nobody wants this but it's the grim reality, at one point you won't be able to keep people in their homes unless you transform them in tombs.

Quote from: The Sceptical Chymist on May 07, 2020, 09:16:32 AM

Things are pretty bad right now, but we haven't reached doomsday yet. If businesses start reopening, there will be a large number of people returning to work, even if some businesses are cutting back on their work forces. It's going to take some time, but things are going to get better.

I'm really curious how long it will take.
Never in modern history have we experienced this, we have no model, you can't compare this to 1918, it might take only a few months in a hyper optimistic scenario or years. I think that it's probably the first economic crisis when the attitude of the people will have this huge impact, will the majority change their spending habits? For how long? These are questions that nobody knows and I doubt anyone can predict them accurately.

Quote from: dothebeats on May 07, 2020, 01:30:13 PM

If it's already that worse in America, imagine the developing countries struggling for economic stability and at the same time fighting the pandemic with very little resources to work with.

And the problem is that developing countries are dependent on how things evolve in the developed countries.
The Europeans are waiting for the economy to restart so they have money to spend, developed countries are waiting for Europeans and Americans to have money so they can start producing stuff again. And some will be waiting for tourists....and that will be a long wait...

Quote from: so98nn on May 07, 2020, 12:17:16 PM

You can't build nation stronger with no one in it. Similarly you can't grow your economy!

You can't build anything with everybody staying at home and not working either.
Sooner or later you will have to choose, just as nobody likes going to war but at some point, you know that it's not your choice anymore.

dothebeats

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If it's already that worse in America, imagine the developing countries struggling for economic stability and at the same time fighting the pandemic with very little resources to work with.

Here in the Philippines, the government already said that they are expecting the worst when the hard lock-down is lifted on the 15th. They are sure--among with the scientists and chaos theorists--that many will die, but the country cannot afford another month or so of hard lock-down else the people will die of hunger. How will this pan out until a vaccine is created, we don't know. But it's going to be pretty messy for sure.

Trump changing his narratives from a proud leader capable of bringing up virus-proof ideas on the table to a concerned and somewhat unsure man speaks volumes about how dire this situation really is for the US. I'm sure he had read the numbers, and it kept on rising at an alarming rate albeit the administration trying to prevent the closure of many businesses by giving aid and cash. He was always this cocky guy that speaks before he thinks, but that has changed now--and perhaps that's for the better (at least during this time.)

I don't think the reopening of the economies would be the answer to the growing woes this pandemic has caused. Global economy was taking a small beating prior to the spread of COVID-19, and it was largely accelerated by this current pandemic. Rebounds on Q2 of 2020 will not happen, and I'm sure that people can also see that easily. Right now, what Trump is doing is conditioning the mind of the people that 'all will be well' without providing a timeline or laying down a solid game-plan to at least mitigate the damage of this trying time.

Needless to say, Trump's administration overestimated their capabilities to combat the problems this pandemic brought forth. Summertime would not be good for the Americans, for damn sure, with that growing unemployment rate as businesses close and people running out of money.

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Quote

Is it time to stop pushing this "everything will blow over by summer" narrative yet?

Trump's tone has changed quite a bit. Now the message is "more people are definitely going to die, but the economy is more important." That tells me the underlying economic situation is pretty dire.

I don't believe reopening is going to bring a miraculous economic recovery. Surveys show a strong majority are in favor of the shutdowns and are more concerned about the epidemic than the economy. That (combined with high unemployment) probably means we can expect very weak consumer spending going forward. The Trump administration is in for a rude awakening when that becomes more obvious.

Surveys will definitely show that people are in favor of lockdown in US. Because, unlike any other countries, US citizens are getting a monthly help of $1200 every month. So, their basic needs a definitely being taken care by the government. So they are not feeling that pinch to survive. Even though US government is printing money to cover that expense, still the citizens are in good shape financially. Now that the basic needs are taken care, economy is the area of priority for Trump.

Reopening may not solve the issue overnight, but that's the best bet that Trump has in his kitty. Unless and until people spend their money, the economy is not going to take a U-turn. Majority of the countries are facing similar issues and re-opening may solve this unemployment issue to some extent. Full-fledged impact can only be seen once the situation normalizes but it is very unlikely for another 2-3 months.

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Quote from: The Sceptical Chymist on May 07, 2020, 09:16:32 AM

Quote from: exstasie on May 06, 2020, 03:20:38 PM

I don't believe reopening is going to bring a miraculous economic recovery.

My suggestion would be to lower your expectations a few notches. Reopening businesses won't be a panacea for the economy, but it will help.

My expectations have obviously been lowered. It's other people who still seem incredibly optimistic. "We're going to reopen the economy and everything is going to get better!" Even you are saying it yourself ("It's going to take some time, but things are going to get better.")

The point is, it's not really an issue of time. It's a question of whether the global economy can dig itself out of a deflationary cycle.

The Trump administration keeps promising a "tremendous rebound" in the second half of the year and people seem to be eating it up despite how unlikely it looks. None of the middle class work-from-home people I know is concerned at all. This is just a vacation for them. The stock market refuses to even pull back despite unprecedentedly bad economic data. So much optimism, it just screams of a dead cat bounce.

Quote from: The Sceptical Chymist on May 07, 2020, 09:16:32 AM

Things are pretty bad right now, but we haven't reached doomsday yet.

Of course it's not doomsday. If doomsday is coming, then this is the beginning. In 2008 terms, the Bear Stearns collapse hasn't happened yet.

so98nn

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Quote from: The Sceptical Chymist on May 07, 2020, 09:16:32 AM

Quote from: exstasie on May 06, 2020, 03:20:38 PM

Is it time to stop pushing this "everything will blow over by summer" narrative yet?

I'm not sure what exactly is expected to blow over by summer, but my guess is that the COVID-19 situation will have at least improved by then--but those layoffs and all the economic damage that's been done certainly won't be repaired so quickly.

This is a guess, we can't rely on a guess mate. Also, COVID-19 is seemingly a virus with similar biological activity that has resemblance with HIV virus. It could happen that we will never see a vaccine for it and the treatment might include extra care, pumping immunity and in severe cases ICU's.

My point is, how they will overcome the situation like that one?

Will we have business re-opened? Would that be any good, because since it will gather huge crowd of asymptomatic people with the healthy one and worsen the case. Its been ages and we still dont have HIV vaccine, imagine that case with COVID-19 which mostly results into death.

Yes, USA has fallen but they can't just express it publicly. To be honest the more death occurs in their country the more labour they are loosing in turn.

You can't build nation stronger with no one in it. Similarly you can't grow your economy! Thats just too sarcastic when Trump assures it in positive way.

Hydrogen

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Trump's handling of the US economy resembles a movie scene where a character is mortally wounded and bleeding out. Their companions say: "don't worry, everything will be ok! Think positive, think positive"! Deep down, I think everyone knows circumstances may not end well. They vaguely resemble a no win scenario. People naturally want to mentally will events to have a positive outcome. And so we have Trump trying to spiritually manifest a positive outcome to what appears to be a disaster in progress.

Many are fond of saying we've never encountered an economic disaster like this, before. On the other hand we've never had so many tools: science, technology and resources available to address a disaster like this either. Economic depression isn't our only option. Perhaps an inverse opposite will occur, where we'll witness a sharp increase in innovation and startups which develop around addressing the pandemic in adjusting to whatever lifestyle best suits it.

The Sceptical Chymist

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Quote from: exstasie on May 06, 2020, 03:20:38 PM

Is it time to stop pushing this "everything will blow over by summer" narrative yet?

I'm not sure what exactly is expected to blow over by summer, but my guess is that the COVID-19 situation will have at least improved by then--but those layoffs and all the economic damage that's been done certainly won't be repaired so quickly.

Quote from: exstasie on May 06, 2020, 03:20:38 PM

I don't believe reopening is going to bring a miraculous economic recovery.

My suggestion would be to lower your expectations a few notches. Reopening businesses won't be a panacea for the economy, but it will help.

Quote

J.Crew is the first major US retailer to file for bankruptcy amid the coronavirus pandemic, but it's unlikely to be the last.

On the radar: Attention is now on J.C. Penney and Neiman Marcus, which have reportedly come close to filing for bankruptcy in recent weeks.

J.C. Penny has been on death's door for a long time now, so that isn't surprising. I wasn't aware about the J. Crew situation, but the first thought that pops into my head is that they probably didn't have a strong web-sales business going for them. And I don't know much about Neiman Marcus, but brick-and-mortar retailers have been suffering for years and I expect quite a few of them to be gone in a few years--coronavirus or not.

Things are pretty bad right now, but we haven't reached doomsday yet. If businesses start reopening, there will be a large number of people returning to work, even if some businesses are cutting back on their work forces. It's going to take some time, but things are going to get better.

Wenbing

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This pandemic has made me to believe two things:
1. Everything is subject to change
2. There is no utopian business system anywhere.

We see how a virus killed people and destroyed millions of jobs globally.

Well, things have changed significantly. Many businesses will maintain a lean startup and remote working.

All business will consider laying off workers that are not essential for now.

Sure...we shall recover but its not anytime soon.

coin-investor

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Quote from: exstasie on May 06, 2020, 03:20:38 PM

Is it time to stop pushing this "everything will blow over by summer" narrative yet?

Trump's tone has changed quite a bit. Now the message is "more people are definitely going to die, but the economy is more important." That tells me the underlying economic situation is pretty dire.

I don't believe reopening is going to bring a miraculous economic recovery. Surveys show a strong majority are in favor of the shutdowns and are more concerned about the epidemic than the economy. That (combined with high unemployment) probably means we can expect very weak consumer spending going forward. The Trump administration is in for a rude awakening when that becomes more obvious.

If they have done that before the start of March they are already back in business, they should have taken the lesson of Italy and other countries, Trump is very arrogant and do not have the foresight to things like, has was warned about the lax and reopening, now so many people in the US are suffering, you cannot beat pandemic your own way.

abhiseshakana

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Around 200 countries in the world are affected by corona and are trying to overcome the corona pandemic without knowing exactly when the outbreak ends. Developed countries that we consider rich and great countries also affected and they are trained to handle it because the spread of Corona is so fast and has a huge impact on the social sector, the economy, to the financial sector. Moreover, until now the disease outbreak vaccine has not been circulated.

The economic downturn of the two countries with the world's largest economy will have a significant impact on the world economy, the United States has just released data on gross domestic growth in the first quarter of 2020 minus 4.8% compared to the same period last year. While China previously recorded the economy in the first three months of this year minus 6.8%. the global panic escalation was very high due to the corona pandemic, causing irrational reactions in the financial sector as well as capital outflows from emerging market countries.

All this pessimism arises from the lack of clarity regarding the end of the pandemic. In thinking as a layman why all countries are not compact to stop completely for 2 weeks or 1 month to really stop the spread of corona. Of course, the loss will be smaller than the economic damage that occurs if the corona drags on.

In a pandemic like this, the hardest-hit countries are foreign debt, countries that depend on imports and countries that rely on dollars.

davis196

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Quote from: jackg on May 06, 2020, 03:28:39 PM

If the US has some sort of redundancy pay (severence package is it called?) then this will compound the problem too and cause companies losing employees that have been there for years to see an inability to take on workers until they're back in profit unless they take out loans...

The debt bubble becomes a problem when the economy starts to grind to a hault and then something else will have to happen that we haven't seen yet (afaik). I think it's looking more and more likely that governments across the world will have to look into socialising large areas of the economy until they become profitible and can be sold (the banks were managed in a similar way but these SHOULD bounc eback better than the banks since the liability is spread quite a bit more it can't be put down to a banker and an insurance salesperson in some office somewhere and people have more confidence than 2006-2008 at the moment).

Yeah,the US economy is build over leverage(big amounts of debt) and when the company revenues go down,all that debt can't be paid,so the banks will start having issues with their revenue,so the situation gets even worse.The possible solutions are two.The first one is the nationalization of banks and corporations by the governments so they could be saved.It will cost trillions and efficiency of this method is questionable.
The second solution is shaving all debts.The banks will survive without government support,but many people will lose a big portion of their savings.I can't say which solution is better.They are both bad.

jackg

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If the US has some sort of redundancy pay (severence package is it called?) then this will compound the problem too and cause companies losing employees that have been there for years to see an inability to take on workers until they're back in profit unless they take out loans...

The debt bubble becomes a problem when the economy starts to grind to a hault and then something else will have to happen that we haven't seen yet (afaik). I think it's looking more and more likely that governments across the world will have to look into socialising large areas of the economy until they become profitible and can be sold (the banks were managed in a similar way but these SHOULD bounc eback better than the banks since the liability is spread quite a bit more it can't be put down to a banker and an insurance salesperson in some office somewhere and people have more confidence than 2006-2008 at the moment).

exstasie

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Came across a couple pessimistic articles today about the US economic outlook.

The White House keeps talking about a "tremendous rebound" coming in Q3, and everyone keeps saying the unemployment numbers are only temporary. However, the mounting permanent layoffs and looming bankruptcies are starting to challenge that picture:

Quote

Layoffs Start Turning From Temporary to Permanent Across America

What’s happening to Michigan Maple points to a worrying trend emerging from the stacks of layoff notices filed by businesses in California, Florida, and New York, where service industries have been hammered by lockdown orders, as well as politically important swing states such as Michigan and Ohio, where key industries such as steel and autos already faced headwinds going into 2020. Plenty of layoffs that just a month ago were labeled “temporary” are now tagged “indefinite” or “permanent.” Alongside announcements of sweeping staff cuts by major employers such as Boeing Co. and U.S. Steel Corp. and the accelerating pace of downsizing in brick-and-mortar retailing, such notices are a sign that even as businesses continue to hope for a speedy recovery, they are starting to plan for a slow one.

The new permanent layoffs are hitting a wide swath of the economy both geographically and sectorally. Uber Technologies Inc. on Wednesday became the latest major company to announced long-term layoffs, saying it would be eliminating 3,700 jobs, or 14% of its staff worldwide. A day earlier, Airbnb Inc. said it was cutting 25% of its workforce, or about 1,900 people worldwide.

You can see it in Ferndale, Wash., where aluminum giant Alcoa Corp. recently notified state officials that it will be laying off 700 workers by the end of July as it shuts down a smelter that has been a fixture in the community since 1966, part of a plan to “curtail” almost 50% of its global smelting capacity.

In Beallsville, Ohio, American Energy Corp., a subsidiary of Murray Energy, a coal miner already in bankruptcy proceedings before the crisis hit, is laying off 110 workers at its Century Mine, according to an April 27 letter to state officials in which the company cited sudden contract cancellations by major customers. “This layoff will be indefinite and may be permanent,” David Cutlip, the mine’s general superintendent, wrote.

In such industries as aviation, companies large and small are resorting to permanent layoffs. On April 29, Boeing announced it will cut about 16,000 employees, approximately 10% of its workforce, this year.

https://www.bloomberg.com/news/articles/2020-05-06/temporary-coronavirus-layoffs-are-turning-permanent-around-u-s

Quote

These coronavirus job losses will be permanent

The wave of job losses that has come crashing down in the past six weeks has had one silver lining: Many economists and investors think that a good portion of the layoffs are temporary, and people will be able to head back to work once government lockdowns start to ease.

That may be true in some sectors. But for the airline industry, which has been battered by plunging demand as people hunker down at home, changes to its workforce will be more permanent.

General Electric (GE) said Monday that it is cutting as many as 13,000 jobs in its jet engine business for good. The move is designed to cope with an "unprecedented" and "deep contraction" of commercial aviation, according to the company.

Meanwhile, a top executive at United Airlines (UAL) is urging employees to consider leaving the company voluntarily.

J.Crew is the first major US retailer to file for bankruptcy amid the coronavirus pandemic, but it's unlikely to be the last.

On the radar: Attention is now on J.C. Penney and Neiman Marcus, which have reportedly come close to filing for bankruptcy in recent weeks.

Some retailers can't afford to file until stores reopen because they need money from liquidation sales, my CNN Business colleague Chris Isidore reports. The "everything must go" blowouts help get products off shelves and fund operations through bankruptcy proceedings.

"We probably would have seen more file by now if stores were open," Reshmi Basu, an expert in retail bankruptcies at Debtwire, told Chris. "We're clearly seeing a lot of companies engage [bankruptcy] advisors. But it's not a great time."

Investor insight: Looming bankruptcies aren't limited to the retail. Bloomberg reports that Hertz, which was scrambling Monday to get lenders to extend a grace period on missed debt payments, could file for bankruptcy as soon as Tuesday. Shares of the rental car company are down 29% in premarket trading.

https://www.cnn.com/2020/05/05/investing/premarket-stocks-trading/index.html

Is it time to stop pushing this "everything will blow over by summer" narrative yet?

Trump's tone has changed quite a bit. Now the message is "more people are definitely going to die, but the economy is more important." That tells me the underlying economic situation is pretty dire.

I don't believe reopening is going to bring a miraculous economic recovery. Surveys show a strong majority are in favor of the shutdowns and are more concerned about the epidemic than the economy. That (combined with high unemployment) probably means we can expect very weak consumer spending going forward. The Trump administration is in for a rude awakening when that becomes more obvious.

Topic: Layoffs Start Turning From Temporary to Permanent Across America (Read 374 times)