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US weekly jobless claims jump by 6.6M

cnbc.com

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Re: US weekly jobless claims jump by 6.6M

#71

Post by wjossey »

chasd00 wrote: post #59
_curious_ wrote: post #45

Earlier quoted context omitted.

"there's a good chance things will quickly return to normal - or at least most companies will survive and start rehiring under a new normal." Other than optimism and hope, what is your basis here?

what's happening is the result of a medical emergency and not the economy. There's no financial reason or economic reason the job losses are so high. It's still there, the demand is still there, we artificially halted the economy and that generated the job loss. It's certainly not an on/off situation but the job demand is still there and we can get back to work.

Just because the cause of a crisis wasn’t financial, doesn’t mean that it doesn’t trigger a financial crisis. Financial systems are not impervious to medical disasters just because they aren’t financial in nature.

Re: US weekly jobless claims jump by 6.6M

#72

Post by chasd00 »

notyourday wrote: post #29
miked85 wrote: post #11

Earlier quoted context omitted.

This is false, the plan specifically targeted small businesses: https://www.sba.gov/page/coronavirus-covid-19-small-business...

The plan is a death spiral financing which puts a small business into a worse position after taking it than before. They have no revenue due to a government action, loan is based on the value of their payroll with the revenue and the the small business is required to spend 75% of the loan for payroll while being closed . The fact that banks claimed that 0.5% interest is not enough for them to make it worth it so the…

isn't the loan forgiven if it's spent on payroll during the shelter-in-place orders?

Re: US weekly jobless claims jump by 6.6M

#73

Post by wjossey »

_curious_ wrote: post #45
twomoretime wrote: post #16

Earlier quoted context omitted.

On the other hand, hasn't a lot of cash outflow been reduced right now too? I feel like we're putting the economy on pause. If we can survive in this state for another 3 or so months, there's a good chance things will quickly return to normal - or at least most companies will survive and start rehiring under a new normal.

"there's a good chance things will quickly return to normal - or at least most companies will survive and start rehiring under a new normal." Other than optimism and hope, what is your basis here?

In fairness to the poster, this is the refrain you’d hear from many CNBC hosts all day, political appointees, etc. I’m old enough to remember the same positivity as the financial crisis unfolded, so I try to remind myself that public officials have no incentive to tell the public “the economy is going to be fubar till 2020. Hang on folks.”

Re: US weekly jobless claims jump by 6.6M

#74

Post by IAmEveryone »

jmclnx wrote: post #6
bearjaws wrote: post #2

Is the number expected to be this high? I thought one of the core ideas of the stimulus was to prevent firing by giving small businesses a "free" loan if they retained their employees? I've been trying to find a good authority on the economics of this stimulus but it seems I am always stuck finding the same "rehashed" news articles.

The core ideas were reported upon, the real purpose is to bail out the banks (once again) and the fortune 500 companies. Very little is going to the people hardest hit.

Banks really aren’t the focus this time around: the changes since 2008 were quite effective in bringing down risks. The bank-specific measures now aren’t aimed at stabilizing them, but at using them to, for example, use their existing personal knowledge of smaller businesses to direct funding.

Nor would I worry too much about Fortune 500 companies. Their scale makes any graft less meaningful, in relative terms. And since most support seems to be in the form of loans, it’s likely that most of it will be recovered. Boeing just isn’t going to go bankrupt.

The current administration seems to be filled with a specific sort of serial fraudopreneur. Like Saul Goodman, gut without the humor and remnants of decency. With oversight already gutted, I’d expect recently-founded LLCs with beneficiaries that just happen to be endangered-wildlife-shooting-buddies of anyone with a secret service pin the main artery of funneling money. I other as loans quickly spent before the company folds. Or, more directly, by being middlemen suddenly required to do business with the government, earning a 400% markup.

Remember that 3-person electrician outfit from the Interior Secretary’s home town in Montana that somehow got a no-bid contract to rebuild Puerto Rico’s entire grid after the hurricane? That’s this admin’s world.

Re: US weekly jobless claims jump by 6.6M

#75

Post by _curious_ »

save_ferris wrote: post #60
twomoretime wrote: post #16

Earlier quoted context omitted.

On the other hand, hasn't a lot of cash outflow been reduced right now too? I feel like we're putting the economy on pause. If we can survive in this state for another 3 or so months, there's a good chance things will quickly return to normal - or at least most companies will survive and start rehiring under a new normal.

Getting an economy back on track is somewhat of a chicken-and-egg problem: consumers need jobs to obtain income, but companies need sales from said consumers to generate profits, some of which in turn fund jobs. If the economy were to just magically turn back on at its prior capacity whenever this all ends, so many consumer-facing business would die because it's going to take years for everyone who had jobs to get th…

"There's so much optimism around a quick recovery, but we've also gotten really bad at using poor KPIs (like the stock market) to judge economic performance." = fully agreed, and further wondering: what KPIs would you use?

Re: US weekly jobless claims jump by 6.6M

#76

Post by streetcat1 »

throwanem wrote: post #62
streetcat1 wrote: post #47

According to my calculation, minimum wage employees can now get twice in unemployment benefits (for at least 4 months) than his/her original wage. So based on that, even if the economy is open, I failed to see what would incentivize people to return to work.

Unemployment insurance payout per month is usually capped based on what you made at the job you had before you went on it. One assumes that will again be the case once the current crisis is considered to have ended. Unemployment insurance payouts are also time-bound. You don't go on unemployment and stay on it indefinitely; after a few months, barring a rare and hard-to-obtain extension, the benefit ends.

Agree. So I assume that most of the unemployment is in the travel/hospitality/restaurants/retail (etc).

Hence, even after the economy is open, it would be hard to get those people back to work until the "enhanced" benefits run out.

I.e. I expect to see a lot of restaurants/hotels open but with no employees. Or, they will be employees, but their wages will have to be increased by 50%, which would cause runaway inflation.

If this happens, this might lead to spike in automation (AI).

Re: US weekly jobless claims jump by 6.6M

#77

Post by _curious_ »

wjossey wrote: post #67
twomoretime wrote: post #16

Earlier quoted context omitted.

On the other hand, hasn't a lot of cash outflow been reduced right now too? I feel like we're putting the economy on pause. If we can survive in this state for another 3 or so months, there's a good chance things will quickly return to normal - or at least most companies will survive and start rehiring under a new normal.

At least in tech, there have been waves upon waves of layoffs the last two weeks. Those jobs won’t instantly come back, even when the economy recovers. Beyond tech, many small business will never reopen. Their suppliers will now be over staffed, and need to lay-off. The suppliers of their suppliers will see a reduction in their order volume, and will do layoffs. Etc, etc. I’m not an economist, but it doesn’t take an…

Honestly, I put more faith in a random internet person sharing their opinion on HN using a bit of logic, reason and current reality than I would someone who actually considered themselves to be an "economist" (which btw fully deserves air quotes whenever saying outloud).

Re: US weekly jobless claims jump by 6.6M

#78

Post by Leherenn »

jonplackett wrote: post #26

Is this much job loss happening elsewhere, like Europe?

Here it's mostly "partial layoffs". Basically you're still employed and can be asked to work at any time (e.g. 40% on Monday, 0 until Friday and 10% on Friday). When not working, 80% of the salary is paid by then unemployment office.

As far as I know, it means you cannot do another job instead, you're still on payroll. Though individual employer might show goodwill.

As a result, "real" unemployment has barely increased, but about 1/3 of the workforce is on some kind of reduced hours (or their company has signed up for the scheme, though not necessarily reduced hours yet, it's not clear to me).

Re: US weekly jobless claims jump by 6.6M

#79

Post by IAmEveryone »

streetcat1 wrote: post #47

According to my calculation, minimum wage employees can now get twice in unemployment benefits (for at least 4 months) than his/her original wage. So based on that, even if the economy is open, I failed to see what would incentivize people to return to work.

it’d be quite stupid to give up your job in this “economy” for a benefit limited to 4 months.

Beyond that, it just shows that minimum wage is nowhere close to covering basic necessities, especially for families.

Even if the mechanism you fear does start happening, the result would be that employers would (finally) have to raise wages. Win-Win!

Re: US weekly jobless claims jump by 6.6M

#80

Post by _curious_ »

lallysingh wrote: post #56
frankbreetz wrote: post #25

Earlier quoted context omitted.

If no one has any money to buy anything, that is bad for business.

Perhaps they've gotten rid of the bottleneck in capitalism: customers. If the government will pay instead, it's much easier to start afloat. No product required!

So sad but true.
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