10 Signs The US Is Heading For A Depression

by Tyler Durden Thu, 04/02/2020 -  

Authored by Mike Whitney via The Unz Review,

1– Unemployment Is Off-The-Charts

Thursday’s jobless claims leave no doubt that the country is in the grips of another severe recession. More than 6.6 million Americans filed for unemployment insurance in the last week. That number exceeds the gloomiest prediction of more than 40 economists and pushes the two-week total to an eye-watering 10 million claims.

According to CNBC:

“Those at the lower end of the wage scale have been especially hard-hit during a crisis that has seen businesses either cut staff outright or at best freeze any new hiring until there’s more visibility about how efforts to contain the coronavirus will work.

“We’ve lived through the recession and 9/11. What we’re seeing with this decline is actually worse than both of those events,” said Irina Novoselsky, CEO of online jobs marketplace CareerBuilder.” (CNBC)

According to New York Magazine:

“Economists at the Federal Reserve Bank of St. Louisprojected Monday that job losses from the coronavirus recession would reach 47 million and push America’s unemployment rate to 32.1 percent — more than 7 points higher than its Great Depression–era peak.”

2– Service Sector Has Been Walloped By The Virus

Services account for 70% of the US economy, but presently the sector is in meltdown. According to the analysts at Wolf Street: “Employment contracted sharply and hours were reduced for those still employed. “The employment index plunged from +6.1 to -23.8, also the lowest level on record...

Retailers got whacked. The Retail Sales Index of the Texas Retail Outlook Survey collapsed from the already beaten-down level of -2.5 in February to an epic all-time low of -82.6 in March… (Also) the general business activity index collapsed from the beaten down level of -5.0 to a historic low of -84.2...

Comments from retail executives were somber:… “Most of our business has gone to zero except for essential locations such as hospitals, military bases and prisons… We are contemplating at this moment sending most employees home while our owners determine whether they can afford to pay reduced salaries and cover benefits for a short period while we see if things improve or worsen” (Wolf Street)

3– Economic Carnage Extends Across Sectors

Business Insider: “Recession risks are rising as coronavirus spreads around the world…The crisis will clobber airlines, shipping, hotels, and restaurants...

“Sectors reliant on trade and the free movement of people are most exposed,” said Benjamin Nelson, a Moody’s vice president and co-author of the report.

Carmakers, gaming, and retail will be hit hard by supply chain disruptions, the analysts said...

“A lengthy outbreak would affect economic activity for longer, leading to heightened recessionary dynamics and a more significant demand shock,” Moody’s said. “A sustained pullback in consumption would hurt corporate earnings, prompt layoffs, and weigh on consumer sentiment.”(Business Insider)

Car sales have also dropped dramatically in the last two weeks. On Wednesday,Hyundai reported that sales had seen a decline of 43 percent for March compared to the same period in 2019. That’s a drop from 61,177 vehicles in March 2019 to just 35,118 during the same month in 2020. All other car manufacturers are experiencing similar weakness in demand.

4– The Bloodbath On Wall Street Continues

U.S. shares sold off again on Wednesday for the third time in four days wiping out most of last week’s bear market rally. The SandP 500 dipped 114 points while the Dow Jones lopped-off nearly 973 points by the end of the session. Analysts now believe that last week’s 20% surge was a temporary reaction to Trump’s multi-trillion dollar fiscal plan. By a 9 to 1 margin, investors are now betting that stocks have further to fall.

To continue reading, please go to the original article here:

https://www.zerohedge.com/markets/10-signs-us-heading-depression