The Next Jobs Report Will Be Bloody

Mish

Mall of America will temporarily close. Restaurants and bars in 16 states will close. Macy's will close. Much more.

Ohio Unemployment Rate Skyrockets

ZeroHedge Reports Ohio Unemployment Skyrockets By 600% After All Bars & Restaurants Shuttered

A new Marist poll this week for NPR/PBS News found 18% of US adults responding they'd already either been laid off or had significant reduction of hours due to the ripple effect of the pandemic.

For an indicator of just how high national unemployment may skyrocket, look no further than Ohio, which on Sunday night declared a 'health emergency' and shut down all bars and restaurants state-wide. Journalist Liz Skalka for The Toledo Blade reports that Ohio Senator Rob Portman (R) received "new data on Ohio's unemployment claims today: 45,000 claims this week compared to 6,500 last week."

The state-wide ordered shutdown of dining and drink establishments by Ohio Governor Mike DeWine on Sunday night impacted about 10% of the state's workforce, some 500,000 people

Car Production Curbed

After a round of bickering over details, Detroit Automakers and UAW Agree to Curb Production.

The Detroit Three automakers and United Auto Workers agreed on Tuesday to curtail production at U.S. factories and limit the number of workers on the job at one time to prevent the spread of the coronavirus among roughly 150,000 factory employees. The union and the automakers agreed to “rotating partial shutdown of facilities, extensive deep cleaning of facility and between shifts, extended periods between shifts, and extensive plans to avoid member contact,” the union said in a statement.

The agreement came hours after UAW President Rory Gamble went public with his dissatisfaction with how General Motors Co, Ford Motor Co and Fiat Chrysler Automobiles NV had responded to his proposal on Sunday that the companies stop production in the face of the coronavirus threat.

Long Recovery for Airlines

Reuters reports U.S. airlines, saying it will take a 'long time' to recover, try to quickly reduce workforce.

U.S. airlines are seeking to quickly reduce their workforces through early retirement packages or unpaid leave of up to 12 months with medical benefits in an effort to cut costs as the rapid spread of the coronavirus keeps people from flying.

“Based on the decline in air travel, we need to quickly line up our staffing levels with the reduced flying schedule,” American said in a message to flight attendants seen by Reuters. The carrier said “it’s likely to take a long time for the airline industry to bounce back.”

American has more than 86,000 unionized mainline employees, including about 25,300 flight attendants and 13,800 pilots.

Under a deal offered to workers on Tuesday, flight attendants, mechanics and gate agents can opt for a period of six, nine or 12 months of unpaid leave while keeping medical benefits and travel privileges. They can also take early retirement with two years of medical benefits, but no pay.

More than 5,000 Delta flight attendants have taken a voluntary unpaid leave option starting in April after the company extended a deadline for requests, according to two Delta employees, who declined to be named because they are not authorized to speak to the media.

Delta has extended unpaid leave options through July, according to a memo seen by Reuters. It is also paying flight attendants’ medical premiums while on leave, but the cost will be deducted from their paychecks when they return to work, the employees said.

The take-up for April represents around 1/5 of Delta’s 25,000 flight attendants, but still means the company would have more employees than it needs to serve a drastically reduced April flying schedule.

Airlines for America - the trade group representing American, Delta, United, Southwest Airlines Co and others - is seeking a federal aid package, including $25 billion in grants and $25 billion in loans, they say is needed to survive an unprecedented downturn in demand.

States With Imposed Restaurant Shutdowns

The above table from Eater.Com.

​That's 15 states and growing including most of the largest states in the nation.

Restaurant Dining

Chart from Calculated Risk.

  • The US was off 84% YoY as of yesterday.
  • As of yesterday, San Francisco was off 100% YoY, Boston was off 100% YoY, and Seattle was off 100%.
  • As of March 17th, 13 states and D.C. were off 100%, Soon it will be all states.

Mall of America Closes

Please note Mall of America Closes, Target, Best Buy to Reduce Hours.

Mall of America to Macy’s and Nordstrom saying they are shutting down for at least two weeks.

Best Buy said Tuesday it will reduce store hours to 10 a.m. to 6 p.m. And starting Monday, it will only allow 10 to 15 customers in stores at a time for at least two weeks, while also serving customers through curbside pickup. It also will have fewer employees staffing the store.

“Macy’s is a biggie — it’s an anchor in many malls,” said Saunders, adding that its closing will put pressure on other stores and shopping malls to close. “No one is going to want to go to a mall if only half of the stores are open.”

Some retailers who were already struggling might not be able to survive the temporary closures, analysts said.

Colorado Has 1600% Jump in Unemployment Claims

Newsweek reports Colorado's Unprecedented 1600% Surge in Unemployment Applications Crashes Server.

Unprecedented Wave of Claims

Unemployment servers also crashed in Ohio and New York.

Factor in casinos, airlines, the UAW, Boeing, countless retail stores etc., and the unemployment rate may easily top 15% in the next report.

Mike "Mish" Shedlock

Comments (55)
Russell J
Russell J

The way things are headed 25% seems more likely.

No. 1-23
Tengen
Tengen

Can't the BLS just consider these workers as "discouraged" by a pandemic? All we need to do is remove many of them from the official workforce to keep unemployment to an aesthetically pleasing single digit figure. Maybe a new hedonic adjustment is in order?

The BLS has long subscribed to Stalin's idea of no person, no problem. They've gotten away with it so far, so they may as well shift into another gear and get chopping!

Casual_Observer
Casual_Observer

My forecast is 40% by the time all is said and done in a few months. I would not rule out a declaration of war against someone this summer just to blame someone for all this.

PecuniaNonOlet
PecuniaNonOlet

The table is short. I can tell you that Harris, Fortbend, and Travis counties in Texas have all ordered restaurants and bars closed. These counties encompass Austin, Houston and surrounding areas. I suspect most metro areas of Texas are under shutdown orders.

DCowley
DCowley

Mish - I started following you after the 2008 fiasco. You always had some of the best information offered up. Then things rocked along so nice for a while and your writings were good, sometimes viewed with a hint of politics but not much and I followed you out of habit and gave lots of your articles a cursory glance and moved about my day.

But..when the going gets tough, you shine. You kick it up a notch. You are 'go to' reading for anyone looking for direction and a possible path out of this mess. No political slant, just good rock solid information based on data sprinkled with common sense. Until this most recent crisis passes, you are the go to read whenever anything drifts from your fingertips. Dammit...its just good work. Keep it up.

MiTurn
MiTurn

My sister and bro-in-law closed their long established eatery in Oregon; they had to let everyone go except for two cooks. They're left with trying to make the business profitable using only takeout.

Note: "takeout" is a foreign word to me. In the Pacific Northwest (and elsewhere) it's called "to-go."

numike
numike

and I just want to kiss you all! https://www.youtube.com/watch?v=hO4BhXaMpxs

ohno
ohno

They tore down my favorite mall, which was one of the larger ones, the only retailer left standing was Macy's the rest was destroyed. Then they built an outdoor mall here in kansas where we have freezing winters i've gone there a few times in winter and you get attacked by the employees because they haven't seen anyone all day. Now they were talking about rebuilding the indoor mall that they closed down but that was before all this recent crap. Who are the idiots that make these choices?

Quatloo
Quatloo

The March jobs report will be a bloodbath when it comes out. I’m convinced they will either delay the report indefinitely or announce a huge modification in how it is produced. Maybe Trump will just send home the labor department people who produce the report, saying they are non-essential workers.

Tony Bennett
Tony Bennett

Retail sales.

Lost in the noise yesterday was retail sales for February reported.

consensus … +0.2%
range of "experts" … -0.1% to +0.3%

actual … -0.5%

March will be FUGLY … and then some.

Tony Bennett
Tony Bennett

atm oil down > 13%. Ouch!

Deflationary.

Herkie
Herkie

Oregon has not ordered non essential business to close, but many are anyway. My favorite hang out for pizza and beer is closed for a month with only their take out still working. At least 200 people out of work. And it will migrate to a more permanent situation in a month's time if the situation is not under control by then. I know the owner, he was my next door neighbor for a while, he has made millions from the business, he can afford to shut down for as long as it takes, and when he does reopen even next year it will still be the #1 pizza restaurant in the region, he will go right back to making money by the truckload. But as much as he wants his people working he can't justify the risk to their and patron health. The employees are just going to have to be the state's responsibility till this is contained. And had Trump done the right things back in early February that he now claims he did but the liberal media is slandering him, we would have a major recession rather than a looming depression with millions out of work.

I will also add, I was shopping online for audio visual equipment for the new house and item after item was OUT OF STOCK. It is hard to decide on a new TV and home theater system when you don't know what the comapatibilities of the new PS5 will be when it comes out, but it too has been delayed so I can't shop in earnest till I know what those specs will be, but a good home theater sound system should not be dependent upon the TV or game unit, still Yamaha, Pioneer and others (except the higher end Bose) were all temporarily out of stock, meaning the factories they or their components are made in China are closed.

If you have no products to sell then places like Best Buy have no need of employees to sell them for the duration, and even the products they do have in stock are not exactly flying off the shelves as people stay home in droves.

One bright side, yesterday gasoline FINALLY showed some response to the crashed price of oil/gas. Costco gas dropped 30 cents with premium at $2.899 and regular at $2.549. Funny how it goes up so fast they MUST have the spot price ticker for RBOB running somewhere, but on the way down it can take weeks to start dropping. I just checked, spot is 67.7 cents per gallon as I type, down almost a full buck from just two weeks ago, and the markup on motor fuel is still historic even with the 30 cent drop here yesterday. Since we are in a declared emergency I should think gouging laws would be in effect.

AWC
AWC

Hard to imagine what the Fed is conjuring up about now. What ever it is, it will be epic.

jivefive99
jivefive99

Once Trump left denial phase and into "doing something" phase, could he have been slow all this time to make things as bad as possible, only to come to the rescue once the inevitable peak and recovery starts, just in time for the election? The very mad stable genius at work?

Sechel
Sechel

salient post

Sechel
Sechel

something to consider. we could see a huge uptick in crime if this continues

abend237-04
abend237-04

Two antivirals appear to make a difference:

Wish I had some visibility into what continues to defy Chinese efforts in getting their daily death rate down faster such as: Are returning travelers driving new cases? Are daily deaths now coming from older folks who self-treated and ignored it at home until too late? Etc., Etc.
I expect we'll see much better news, and soon, on treatment options. It's not like every biolab on the planet suddenly went stupid when cable news discovered the pandemic, months too late.

Tony Bennett
Tony Bennett

Holy Cow!

Oil down 19%.

"teens" Watch On.

Sechel
Sechel

trump's responses are not bad. but they are late. 1-2 months in many cases. in the beginning trump was not willing to acknowledge the gravitas of the crisis

Tm2mc
Tm2mc

Unless a vaccine becomes available within a week or so, I do see a depression. Things have already become ugly here in NYC.

shrpblnd
shrpblnd

The biggest mall owner in the U.S., Simon Property Group, announced it will be closing all of its malls and outlet centers in the country, effective at 7 p.m. until March 29.

Quatloo
Quatloo

Loss of 281,000 jobs this week.
That is the tip of the proverbial iceberg.


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