
A 3000% jump in jobless claims has devastated the US job market - finphil
https://www.cnn.com/2020/04/02/economy/unemployment-benefits-coronavirus/
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01100011
Any idea why the stock market is still holding up? Whether or not you think
the virus will be resolved quickly, the economy has now taken a serious hit.
Is the feeling that the government stimulus actions will be enough to
completely erase the Covid damage? Will they resolve the shaky fundamentals
and sky-high valuations we saw heading into this mess? Perhaps I'm a simpleton
for expecting rational markets, but it seems like equities should be falling
further.

~~~
eloisant
I'm not sure the economy is getting a hit as big as it looks, but it's rather
on "pause".

I think many of these workers are laid off so they can get unemployment
benefits, and they'll be hired again by the same companies as soon as the
quarantine ends - which should take a couple month if we look at what happened
in China.

Sure, some companies will die from losing all of their business during the
quarantine, but the number of jobless claims is not representative of the
workers who will still be out of a job after the quarantine.

~~~
01100011
The million dollar question is, will this be a 'V shaped recovery', a.k.a.
'pause' or will it turn into something worse. I hear a lot about companies
with cash flow problems which may not survive the hit. Is that true? Beats me.
It seems credit is cheap right now. What about long term though? For many
industries, it takes a while to spin things back up and see cash flow. Will
the economic mitigation measures be enough to see those companies through?

We may also be looking at permanent changes in behavior. Sure, there is a lot
of pent up demand for getting out and socializing, but if people are being
bled dry by meager stimulus checks, they're not going to rush to fill the
restaurants and malls when this is over.

Edit: Just saw this, an interview with El-Erian on liquidity issues,
[https://www.youtube.com/watch?v=MjzBKtVTdtQ](https://www.youtube.com/watch?v=MjzBKtVTdtQ)

~~~
ta1234567890
Credit being cheap only works if you have a good plan and expectations that
the business is going to survive. Most small businesses are not in that
position (and even large businesses like Macy's, Cheesecake Factory and
Subway). Shops that are not getting foot traffic now have no idea when they'll
be able to reopen, getting a loan to pay their lease would probably be
unpayable afterwards. Business owners also need to make a living, so they are
looking into getting jobs or starting alternative businesses. Their original
businesses are most likely not coming back.

And there's no way the economy will fully reopen before at least a year. China
is not a good comparison, because 1) the US did not follow the same approach
as China in dealing with the virus, 2) China has been lying about their
economy and number of cases and 3) even if China was fully open for business
now, the biggest markets are not buying - Europe and the US are just beginning
a huge recession, that in turn will hit China back and will affect the
recovery of the world economy.

A V shaped recovery is, in my opinion, a made up dream to keep people from
panicking.

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BossingAround
So as a non-US citizen, I didn't know about "at-will employment" [1].
Apparently, in some states, companies can fire people "at will" (so without
any reason, at any given moment).

As an EU citizen, this sounds utterly horrifying to me. How can the US have
that little protection of their workers..?

[1] [https://en.wikipedia.org/wiki/At-
will_employment](https://en.wikipedia.org/wiki/At-will_employment)

~~~
commandlinefan
On the flip side, European countries had high unemployment even before the
Coronavirus recession because employers were reluctant to take on new
employees knowing that it's much more difficult to get rid of bad ones there
than here.

~~~
jaynetics
Well, Germany @ 3% unemployment vs US @ 3.5%? Seems it's somehow possible to
employ people even with protections.

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gullyfur
> Germany @ 3%

Did you cherry-pick that one? Spain @ 14.2%, Italy @9.7%, France @8.5%. Spain
was actually at 26.2% back in March 2013.

[https://www.google.com/publicdata/explore?ds=z8o7pt6rd5uqa6_...](https://www.google.com/publicdata/explore?ds=z8o7pt6rd5uqa6_&met_y=unemployment_rate&idim=country:es:it:fr&fdim_y=seasonality:sa&hl=en&dl=en)

~~~
yokaze
It doesn't invalidate the grandparents point.

You can easily find dozens of countries with at will employment, and high
unemployment.

And I think, Spain has actually less stringent worker protection laws than
Germany.

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11thEarlOfMar
I'd be interested in an analysis of Layoffs vs. Furloughs.

Layoffs being permanent job losses.

Furloughs expecting to go back to work when the social restrictions are
lifted.

A lot of these are people taking advantage of state unemployment insurance,
but who expect to return to work in the next few months.

~~~
SketchySeaBeast
Yeah, I'm not personally aware of many layoffs, they are all furloughs.

~~~
logicalmind
And the level beyond furloughs are paycuts. Many companies are doing fairly
large paycuts (20% or more) in order to retain jobs.

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jeffdavis
I'm curious what will happen to restaurants. Will there be a permanent setback
as people realize how to cook at home and how much money it saves? If so, that
seems like a long-term win for physical and financial health. But in the
medium term will hit people in the industry pretty hard.

I'm also curious how much it really helps health (and maybe even financial
health) overall. Real home cooking is good compared to burgers and fries. But
frozen pizzas are not great compared with some healthier restaurant options.
And some restaurant food is pretty cheap and some packaged food surprisingly
expensive.

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jorblumesea
I would say that these people lose their health insurance, but sadly they
probably didn't have any to begin with, as many of the losses are service
industry jobs. There are many positive things about the US, but the lack of
comprehensive affordable medical coverage seems cruel. Especially tying it to
employment.

