International Workers’ Day, or May Day, comes on the heels of one of the worst periods for workers in quite some time. In the last six weeks, more than 30 million Americans filed for unemployment. At the same time, the S&P 500 gained more than 12 percent and recorded its best month since 1987.
My routine as a kid was pretty simple. I’d wake up, grab the Cleveland Plain Dealer (or The News-Herald, published in the neighboring county) sports section, read every single story and then try as best I could to memorize every box score, statistic and name for every sport. I loved (and love) sports. I also loved the Plain Dealer, but sadly the Plain Dealer is being murdered.
I wrote last week about how the economic relief package known as the CARES Act is severely lacking. One particularly troubling aspect is that the Small Business Administration is tasked with overseeing a $350 billion dollar fund designed to provide cash for small businesses so they can avoid laying people off. This is problematic because it’s something like 10 times the volume of emergency loans they usually deal with on an annual basis.
The devil is in the details, but the gist of that fund, known as the Paycheck Protection Program, is that businesses with fewer than 500 employees can apply for a loan. At the end of the set period of time, if the employer has not laid anyone off, the loan is completely forgiven. There are of course a host of details about how much money a business can receive and some other things but they are irrelevant for the purposes of this post.
For a variety of reasons, I pay close attention to the manufacturing sector. I think it’s partly because I grew up in Cleveland and still have a lot of friends who work in shops and factories — many who are already out of work. Although we’ve more or less transitioned to a services-based economy, making stuff is still a core aspect of the American identity. We all know the service sector is taking a massive blow. We can see the stores closed, we can’t go to our favorite bar. But the manufacturing economy is less visible — except to those in it. The rest of us will feel the impact down the road when this loss of productivity manifests in myriad ways.
This morning the Institute of Supply Management released its March manufacturing report. As expected, it was pretty bad: Reduced demand, a slowing supply chain, reduced employment. But I want to highlight a couple specific data points. Read More
In times of crisis, the kind of economic data that is ordinarily only of interest to economists and finance pros draws more attention from the rest of us as we look for signs of what is going on, and what is to come. Last week’s jobless claims number, the highest in United States history, was a sobering look at what is in store economically.
This week we’ll get another round of jobless claims numbers, along with looks at manufacturing and service jobs that will help us understand the velocity and depth of the economic crisis we are facing.
This morning the Labor Department announced 3.28 million people filed for unemployment, the largest one-week number in United States history. This is a shocking number. It beat analyst estimates by nearly one million claims. It’s four times the previous record.
Yet, the worst is certainly ahead of us.