Important Economic Indicators -- Forecasting a Further Collapse....
Lock-downs and shelter-in-place orders across the United States were supposed to be temporary measures -- put into practice long enough to slow the spread of the pandemic, without causing irreparable economic collapse. Now, however, it is becoming clear that there are much longer reaching consequences at play, as businesses shutter around the country and the globe.
More than 100,000 businesses have permanently closed in the US alone, with those closures causing millions of jobs for citizens desperately seeking an income, which have simply evaporated into thin air.
Below outlines the scale of the next great depression, and all of the important economic indicators:
A recent Gross Domestic Product (GDP) forecast, released by the Federal Reserve Bank of Atlanta estimates an unprecedented drop of 42.8% for the three months through June 2020.
US retail sales, factory output, and industrial production are all down -16.4%, -13.7%, and -11.2%, respectively. The prolong shut down has generated a sort of economic free-fall that is leaving few sectors unscathed.
Already, big names in retail that have been around for decades, like J. C. Penny, Victoria's Secret, and Pier 1 Imports, are breaking the news of their financial problems. J. C. Penney announced that it will soon be declaring bankruptcy, making it the largest retailer to do so thus far over the course of this pandemic. Meanwhile, Victoria's Secret announce the closure of 250 brick and mortar stores, across the US and Canada, and Pier 1 Imports is set to shut down entirely. Furthermore, Neiman Marcus and J. Crew have also filed for bankruptcy.
Major car rental corporation, Hertz, announced in April 2020 that the company was teetering on the edge of bankruptcy, confirming that the suffering is not limited to retailers.
These bankruptcies are just the beginning, proving that there is only so much that the Fed can do, as it attempt to support industries and minimize the destruction.
The restaurant industry is one sector suffering particularly striking losses, with one in every four American restaurants expected to close down for good, already resulting in losses of $30 billion during March and $50 billion in April 2020.
Large businesses will not be spared from this pandemic and economic contraction. For example, Ford, pushed two locations back into temporary shut down, only days after trying to reopen some of their factories, when a number employees tested positive for the coronavirus.
Shutdowns like these are clear examples on how difficult it will be for automakers and other industries to resume operations, while dealing with this pandemic. Of course, this is what they will have to do for the foreseeable future to stay afloat, as there is no vaccine or other easy solutions on the horizon.
There are three things that have to all come together, which include: healthy workforce, healthy supply chain, and healthy demand. It's not just flip-of-a-switch, and everything is as it was -- it's very complicated.
Few people are wanting to commit big sums to discretionary purchases like cars, so even if Ford is producing products, the buyers market is drying up, as Americans stay at home, and are spending on groceries, but little else.
Retail sales dropped 17.2% in April 2020, with clothing and accessory stores hurting the most, down 78.8% from March, and 89.3% year-over-year in April 2020.
Meanwhile, the commercial real estate industry is cause for serious concern. This sector will experience devastation on a scale that will make the 2008 financial crisis look like little more than a blip, with renters unable to pay, and property owners floundering from late checks. And, one striking example, the owner of the Empire State building, collected only 73% of its office rents, and 46% of its retail rents that were due in April 2020.
Evidently, the toll trickles down from businesses to individuals. The number of Americans who have filed for unemployment benefits has surpassed 40 million, making this the worst unemployment crisis since the 1929 Great Depression -- dwarfing it's catastrophe, when 15 million Americans were jobless at its worst point in 1933 -- when compared to today's economic collapse.
The Federal Reserve admits that the unemployment figure is much higher -- when factoring in those that were not actively looking for work, during the examined period, as well as those that are working at significantly reduced hours and pay -- is closer to 30.7%, even though the official numbers, produced by the Bureau of Labor Statistics (BLS), puts the unemployment rate at 13.3% for May 2020.
This economic collapse will not end, when a vaccine for the coronavirus is actually produced and administered, because 42% of the layoffs experienced by workers during this pandemic will result in permanent job losses.
It was estimated at April 2020 that 18 million of the 20.6 million people who lost work classified their situation as temporary, which will not be the case.
All States that have rushed to reopen early and get their economies back on track have experienced new cases of the virus, with over 20 states now experiencing spikes in the coronavirus cases as a result.
The World Health Organization just announced that the world only recently hit the largest number of newly confirmed cases on a single day. This means that the peak was not weeks ago, as some continue to believe, but rather that we are still in the thick of it.
Americans are paying the price, literally, with the government toeing the line, between public health and the economy.
Some experts say that the United States could see a 45% rise in its jobless population by the end of 2020. That means, when compared to last year, 250,000 additional people will find themselves on the streets.
Almost 40% of the people with household incomes lower than $40,000 suffered from a loss of employment in March 2020. Issues like homelessness as well as the tilt towards recession, existed before the pandemic rattled global economies, and don't show signs of letting up anytime soon, despite false promises from politicians that are part of the problem.
Americans are already beginning to see the effects, from foreclosure signs in their neighbors' yards to out-of-business signs posted in store windows.
There is much debate over whether or not the public health and safety measures are worth the devastating economic fallout that will un-doubtably follow.
It is estimated that the number of Americans that will die from the coronavirus will likely triple before the end of 2020, even in the case that current social distancing measures are upheld.
There are estimations that 60% to 70% of all Americans will eventually be infected. It must be noted that 1.3% of those who show symptoms die, an infection fatality rate that is 13 times higher than a bad influenza season.
The coronavirus could very well kill between 350,000 to 1.2 million Americans by the end of 2020, even when discounting the fact that most states will continue to open their economies, and relax social distancing restrictions.
A large part of the virus spread is due to sheer irresponsibility on the part of the US government -- aside from the uncontrollable factors like the high infection rate -- with foreigners traveling to the United States on non-US airlines, completely full of mask-free passengers, without so much as a health check upon arrival.
Apparently, the United States has no policies that require any sort of quarantine after entering the country.
Careless lack of policies like these are a strong indicator of the United States' handling of the pandemic, and representative of the government failure to put proper precautions in place.
The US will only plunge further into its economic and health-related woes, with a death spiral of carelessness and overcompensation.
In summary, the longer the restrictions remain on business, the further global economIes crumble, making a possible recovery more difficult. Health measures that are lifted prematurely will raise risk, resulting in otherwise preventable deaths -- a lose-lose situation for the United States and countries around the globe.
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