9% of the US Has Been Laid Off Due to the Coronavirus

Mish

A SurveyUSA poll reveals 9% of the US is out of a job due to the coronavirus.

Please consider the Results of SurveyUSA Coronavirus News Poll.

Key Findings

  1. 9% of Working Americans (14 Million) So Far Have Been Laid Off As Result of Coronavirus; 1 in 4 Workers Have Had Their Hours Reduced;
  2. 2% Have Been Fired; 20% Have Postponed a Business Trip; Shock Waves Just Now Beginning to Ripple Through Once-Roaring US Economy:
  3. Early markers on the road from recession to depression as the Coronavirus threatens to stop the world from spinning on its axis show that 1 in 4 working Americans have had their hours reduced as a result of COVID-19, according to SurveyUSA's latest time-series tracking poll conducted 03/18/20 and 03/19/20.
  4. Approximately 160 million Americans were employed in the robust Trump economy 2 months ago. If 26% have had their hours reduced, that translates to 41 million Americans who this week will take home less money than last, twice as many as SurveyUSA found in an identical poll 1 week ago. Time-series tracking graphs available here.
  5. 9% of working Americans, or 14 million of your friends and neighbors, will take home no paycheck this week, because they were laid off, up from 1% in an identical SurveyUSA poll 1 week ago. Time-series tracking graphs available here.
  6. Unlike those laid-off workers who have some hope of being recalled once the worst of the virus has past, 2% of Americans say they have lost their jobs altogether as a result of the virus, up from 1% last week.
  7. Of working Americans, 26% are working from home either some days or every day, up from 17% last week. A majority, 56%, no longer go to their place of employment, which means they are not spending money on gasoline or transit tokens.

About: SurveyUSA interviewed 1,000 USA adults nationwide 03/18/20 through 03/19/20. Of the adults, approximately 60% were, before the virus, employed full-time or part-time outside of the home and were asked the layoff and reduced-hours questions. Approximately half of the interviews for this survey were completed before the Big 3 Detroit automakers announced they were shutting down their Michigan assembly lines. For most Americans, events continue to unfold faster than a human mind is able to process the consequences.

Grim Survey of Reduced Hours

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Current Unemployment Stats

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Data from latest BLS Jobs Report.

If we assume the SurveyUSA numbers are accurate and will not get worse, we can arrive at some U3 and U6 unemployment estimates.

Baseline Unemployment Estimate (U3)

  • Unemployed: 5.787 million + 14 million = 19.787 million unemployed
  • Civilian Labor Force: 164.546 million (unchanged)
  • Unemployment Rate: 19.787 / 164.546 = 12.0%

That puts my off the top of the head 15.0% estimate a few days in the ballpark.

Underemployment Estimate (U6)

  • Employed: 158.759 million.
  • 26% have hours reduced = 41.277 million
  • Part Time for Economic Reasons: 4.318 million + 41.277 million = 45.595 million underemployed
  • 45.595 million underemployed + 19.787 million unemployed = 65.382 million
  • Civilian Labor Force: 164.546 million (unchanged)
  • U6 Unemployment Rate: 65.382 / 164.546 = 39.7%

Whoa Nellie

Wow, that's not a recession. A depression is the only word.

Note that economists coined a new word "recession" after the 1929 crash and stopped using the word depression assuming it would never happen again.

Prior to 1929 every economic slowdown was called a depression. So if you give credit to the Fed for halting depressions, they haven't. Ity's just a matter of semantics.

Depression is a very fitting word if those numbers are even close to what's going to happen.

Meanwhile, It's no wonder the Fed Still Struggles to Get a Grip on the Bond Market and there is a struggled "Dash to Cash".

Very Deflationary Outcome Has Begun: Blame the Fed

The Fed is struggling mightily to alleviate the mess it is largely responsible for.

I previously commented a Very Deflationary Outcome Has Begun: Blame the Fed

The Fed blew three economic bubbles in succession. A deflationary bust has started. They blew bubbles trying to prevent "deflation" defined as falling consumer prices.

BIS Deflation Study

The BIS did a historical study and found routine price deflation was not any problem at all.

“Deflation may actually boost output. Lower prices increase real incomes and wealth. And they may also make export goods more competitive,” stated the BIS study.

For a discussion of the study, please see Historical Perspective on CPI Deflations: How Damaging are They?

Deflation is not really about prices. It's about the value of debt on the books of banks that cannot be paid back by zombie corporations and individuals.

Blowing bubbles in absurd attempts to arrest "price deflation" is crazy. The bigger the bubbles the bigger the resultant "asset bubble deflation". Falling consumer prices do not have severe negative repercussions. Asset bubble deflations are another matter.

Assessing the Blame

Central banks are not responsible for the coronavirus. But they are responsible for blowing economic bubbles prone to crash.

The equities bubbles before the coronavirus hit were the largest on record.

Dollar Irony

The irony in this madness is the US will be printing the most currency and have the biggest budget deficits as a result. Yet central banks can't seem to get enough dollars. In that aspect, the dollar ought to be sinking.

But given the US 10-year Treasury yield at 1.126% is among the highest in the world, why not exchange everything one can for dollars earning positive yield.

This is all such circular madness, it's hard to say when or how it ends.

Mike "Mish" Shedlock

Comments (42)
No. 1-13
Greggg
Greggg

lol
lol

Go from 1/3 of the population working before the bioweapon to 1/4, primarily in govt! The unemployment "rate" measured by the bureau of labor and propaganda should print 0,or less than zero. So the US has 300 million,of that 60 million and change has a job!

Zardoz
Zardoz

Its all good... Uber is still operating. I hear you can get 4k as a coronavirus guinea pig. They'll probably only take you if you look healthy though. 6 million unemployed, increasingly desperate people won't be a problem.

OkieNomics
OkieNomics

"This is all such circular madness, it's hard to say when or how it ends."
Mish, I'd like to read your attempt. You correctly held to "deflation" when many were screaming hyperinflation. And yet, asset prices have gone up and up and up, and while equities are down, treasuries are up and real estate (maybe) holding its value. It's also true that excessive money printing (or CTRL-P in MMT) creates hyperinflation. So what are the scenarios that bring an end to this madness?

hmk
hmk

My family doctor is laying off the other physicians in his office as everyone has cancelled their appointments. Some staff will stay to man the ship, barebones staffing. The doctors will do okay not working for a couple of weeks, the staff not so much. My friend is a dentist and he just closed his practice for a couple of weeks also. A few weeks is probable okay, but I am thinking its going to be a lot longer like 4-6 weeks nationwide. That will be devastating. I don't know what the correct policy response for this is but the helicopter money actually seems appropriate. What else can we do. If the f'ing deficit wasn't so high the budget hit would be tolerable but we are starting with a national debt that I don't think was even surpassed in WW2.

JG1170
JG1170

"Central Banks are not responsible for the CV". I'll be going to my grave doubting that statement. The timing, and eventual outcome will be way too perfect (for all the Big Boys that cashed out at the peak) for this to be just a happy coincidence. I mean you get a once-in-a-lifetime pandemic on the very eve of the "real" once-in-a-lifetime banking crisis? C'mon. The banksters knew full well that sans a credible scapegoat, they would be blamed for the 2020's depression - after all the bailout dust settled. But now there will be no blame, no punishments, no memory, no reforms, only rescue packages.

thimk
thimk

the "gig" economy-- how will they get a bailout ?

DBG8489
DBG8489

There's no "solution" to this problem except to ride it out. We created it. We own it. We deserve the consequences.

And by "we" I mean those of us in the United States.

Why do we own it?

Because we elected a "leadership" cadre - from at least the states up - who collectively look like a bunch of monkeys trying to land an L1011 full of passengers - flipping every switch, turning every knob, pushing every button, and just twisting the wheel - hoping something will work while simultaneously throwing shit at each other.

For the past nearly 100 years, we've kept electing them. So yeah - we deserve it.

And I have $1000 (or should I make that a trillion given the coming hyperinflation) that says if we make it out of this, we will keep electing them.

killben
killben

"The Fed is struggling mightily to alleviate the mess it is largely responsible for."

But this is not how it will be portrayed as. It will be portrayed as if this serial bubble blower has done something heroic and saved the world. When the reality is the Fed is an economic arsonist who also runs a fire extinguisher by virtue of being a 2-trick pony (interest rate and printing press) . If you can find bigger scoundrels please give me a call.

stillCJ
stillCJ

Editor

As one "pandemic expert" said: the panic is worse than the virus. In fact that seems pretty obvious. My wife & I are 70+ but we're not worried about it; but then, we don't live in a big city.

KidHorn
KidHorn

I would give this about a month. Eventually people will decide it's better to risk infection. And there will be rioting in some areas.

Freebees2me
Freebees2me

Mish - I'd like to believe that it's ONLY 9%. To me, that would be a win. But, literally everything (and everyone associated with those businesses) is in the process of shutting down. We're looking at 25% unemployment pretty quickly and that will have a dramatic effect on peoples' psyche...

klausmkl
klausmkl

I put myself on a work slow down. I will lay myself off to join the others. Now where do I apply for benefits. I always wanted to collect. Misch do a piece on the coming reset in Real Estate.


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