The ISM Non-Manufacturing Business Activity Index Shows to What Unfathomable Extent the US Economy Has Collapsed

But delivery times explode due to supply chain turmoil. The charts are brutal.

By Wolf Richter for WOLF STREET.

Business activity and production at US non-manufacturing industries in April collapsed to the lowest level since inception of the ISM Non-Manufacturing Index in 1997, from already weak levels in March.

Only one industry, Finance & Insurance, reported an increase in business activity; the remaining 17 industries – ranging from Arts, Entertainment, and Recreation to Utilities – reported a decline in business activity, with some of them essentially shut down in large parts of the US. The ISM Business Activity Index plunged to 26%. A level below 50% means contraction (historic data from YCharts, current data from ISM):

This is how executives see business at their own companies. The Institute of Supply Management gathers these surveys from executives on a monthly basis. The names of the companies are not disclosed in the report. The additional comments by the executives about their own companies are revealing:

Finance & Insurance: “Due to increased loans from [the federal] stimulus package, [we are] seeing an increase in new business.”

Arts, Entertainment & Recreation: “COVID-19 pandemic has forced our business to close as of March 17, 2020. We do not have a re-opening date yet; our purchasing activity has been greatly reduced due to the current business environment.”

Agriculture, Forestry, Fishing & Hunting: “The COVID-19 situation has created significant challenges for the agricultural sectors. Milk prices have declined 29 percent in a few weeks. Milk is being dumped on farms because of the loss of markets. Cattle prices are down 28 percent, pork prices down 24 percent, [and] all agriculture sectors are facing significant price declines. Our agriculture economy is challenged, with poultry, pork, and beef processing plants closed due to COVID-19 cases or impaired due to employees afraid to work side-by-side with other employees. Farmers cannot sell fat cattle locally due to processing plant shutdowns.”

Construction: “COVID-19 is altering the operation, supply chain and sales process of home-building. Stay-at-home orders have hampered business in residential construction. As ours has been deemed an essential industry, we continue to navigate changing guidelines and restrictions on a daily basis.”

Management of Companies & Support Services: “The oil exploration sector is very weak, with the record low price of oil and the country’s shutdown due to the COVID-19 threat. We are hopeful for a bump in activity once the country starts to reopen.”

Health Care & Social Assistance: “COVID-19 has halted much of our standard work to procure items for our organization. It’s halted much of the world, except for health care. Distributors were woefully unprepared for the spread of this pandemic, and many health-care systems/providers depend on them for inventory planning and availability. Combine that with the global [surgical] gown recall just before the pandemic struck — and isolation masks are created from the same material as isolation gowns — and you had a perfect storm for chaos across the supply chain. It will be very hard for major medical distributors who did not manage their core customers well to recover from both the gown recall and the pandemic. It also provided some insight into whether or not the distributor partners were actually skilled at inventory planning and movement. I believe that the healthcare supply chain landscape will change dramatically after this.”

Wholesale Trade: “As an essential business, we have remained open during the month. A significant number of our customers are closed (i.e. schools) and other have substantially reduced their buying (i.e. hotels, office building). Sales of janitorial, sanitation, and paper products [have] increased across all business lines, but other categories are greatly reduced. Overall, reduction in sales of 20 percent to 30 percent.”

Educational Services: “The university abruptly transitioned from students on campus to remote teaching for the spring quarter; however, the number of students registered for the quarter has remained consistent with previous years. Overall, activity dropped 17 percent compared to February and 31 percent compared to March 2019.”

New Orders plunged.

The ISM Non-Manufacturing New Orders Index plunged 20 points to 32.9%. Below 50% means contraction, and this was the first contraction of new orders in over 10 years, amid comments by the executives, such as these: “No new orders booked. Activity level is pretty high, [and we’re] trying to figure how to do business remotely”; and “Core business activities at a virtual standstill.”

Only two of the 18 industries reported growth of new orders: Finance & Insurance and Public Administration. The remaining 16 industries reported declines in new orders (historic data from YCharts):

Employment plunged.

All 18 industries reported a decline in employment in April, and the ISM Employment Index plunged 17 points to 30%. Below 50% means contraction, and the March level of 47% was already in contraction (historic data from YCharts):

But supplier delivery times exploded to new high.

The Supplier Deliveries Index tracks delivery times by suppliers, and longer delivery times increase the index. Due to supply-chain disruptions, the index surged to an all-time high of 78.3% in April. But during Financial Crisis 1, in 2008-2009, there were no supply chain disruptions, and a decline in demand produced faster supplier deliveries, and the index fell during that time, as would be expected during a normal downturn (historic data from YCharts):

In a normal economy, long delivery times mean there is a lot of demand and a lot of economic activity, so the supplier deliveries index is inverse in the overall Non-Manufacturing ISM Index (chart below) and counts as a positive. But in this lockdown economy, supplier deliveries aren’t slow because of demand but because of supply chain disruptions. And this, the ISM points out, “limited the decrease in the composite NMI.”

The Composite Non-Manufacturing Index still plunged.

Without the boost by supply chain disruptions to the Suppliers Delivery index, the overall index would have fallen even more sharply, but it nevertheless plunged 10.7 points to 41.8%, the first contraction since December 2009, and the lowest reading since March 2009, amid comments by the executives, such as, “Fewer resources to do work,” and “All non-essential procedures have been cancelled or delayed” (historic data from YCharts) :

In terms of the Composite Non-Manufacturing Index, two industries experienced growth in April:

  • Public Administration
  • Finance & Insurance.

The remaining 16 industries reported declines in April, listed in order:

  • Arts, Entertainment & Recreation;
  • Agriculture, Forestry, Fishing & Hunting;
  • Retail Trade;
  • Other Services;
  • Wholesale Trade;
  • Construction;
  • Transportation & Warehousing;
  • Mining;
  • Professional, Scientific & Technical Services;
  • Information;
  • Accommodation & Food Services;
  • Management of Companies & Support Services;
  • Educational Services;
  • Real Estate, Rental & Leasing;
  • Utilities;
  • Health Care & Social Assistance.

The ISM report summarized the comments of the executives in these industries; they “are concerned about the continuing coronavirus impacts on the supply chain, operational capacity, human resources and finances, as well as the uncertain timelines for the resumption of business and a return to normality.”

Nobody knew what would trigger the next financial crisis, but just about everyone knew it would involve the record pile of corporate debt. And so it happened. Now the Fed fixed it…  Listing to THE WOLF STREET REPORT: Nothing’s Fixed – What’s Behind the Corporate Debt Bailout

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  129 comments for “The ISM Non-Manufacturing Business Activity Index Shows to What Unfathomable Extent the US Economy Has Collapsed

  1. Pat says:

    Wow we are certainly getting our fair share of things that definitely do go to hell in a straight line around here recently

  2. Groucho says:

    Ahh, so that’s why the stock markets are levitating! ?

    • Joe in LA says:

      Sweet Jerome Powell will never run out of sugar for his beloved.

      • polecat says:

        For PublicAdmin & and Fin-Insur ..

        This is like Ripley finally teasing Mother out of relinquishing that info .. that Co. Directives state explicitly, that any Alien Organisms are to be saved .. for the Weapons aDevision, at ALL Costs !! – while the Crew is expendable ……..

        We, the 80%+ .. are the hosts !

        • polecat says:

          edit- Weapons ‘Division’

          Apologies .. must of accidentally huffed some acid-for-blood fumes ..

    • Phoenix_Ikki says:

      Because SM exist in an alternate reality or they believe so much in their own version of “forward looking projection” that dreams has manifested into some twisted reality now. Couple that with the FED junkie dealer and there you go, forever sugar high.

      All these data look really bad and it’s in line with what you would expect from an economic fallout unlike the world has ever seen in the past 50+ years, however looking at the SM or some of the most over-hyped stock like Tesla or Beyond Meat…the disconnect and insanity is truly maddening to anyone trying to grasp at what’s going on around the world or still believe in any small amount of fundamentals.

      • Tim says:

        Nah, lemmings have a split second in the air before they realise….

      • Tim says:

        At the moment the air cannons of state aid are simply adding to the delusion.

        • Phoenix_Ikki says:

          Yeah I hear you but at the same time there’s a possibility this uptrend will continue a lot longer than you and I think is fundamentally sound. We already know price discovery is not really a thing anymore and when the market knows they got the FED by its balls and as soon as another 10%+ drop, FED will swoop right in to play Santa Claus, so in essence it’s a win win for them. Market rally back to last Feb high, FED stay put with 0% so I am struggling to see outside of small drop here and there, market will just shrug it off outside of maybe a life extinction event like a asteroid striking earth.

        • Tim says:

          Honestly, funny quotes being only what they are, I would rather you be right.

          Or God help us..

        • Cas127 says:

          “air cannons of state aid”

          Nice, very very nice.

          Excellent restatement of the ultimately illusory (and, in fact, counterproductive) nature of money printing to change real asset production or productivity.

      • Paul says:

        I’m watching repriced analysts target prices and many are now being revised upward or less downward so the thinking in a years time that the earning will trend upward. If one uses morningstar ratings many are 5* undervalued on long term basis and S&P rating is more momentum analysis so it appears less bearish.
        So this looks like a suckers rally until the reality of starting up the economy sinks in.
        Likely scenario is stag-flation as all but the 1% get poorer.
        Here in Canada it is going to be a major reset re-ordering of the economy as it stumbles and bumbles along.
        Some of the major retail real estate firms have organized to ask for a government bailout as rent collection is as low as 55% and their is a movement in home rental payments to stop paying rent as the rental boards as closed. A lot of the condo estimated >25% are owned by people who loaned money to buy them are cash flow negative so the prices will collapse, besides the airbnb fiasco big owners who took on too much debt and can’t pay their mortgages.

    • Brant Lee says:

      Yes, and little more than a week later, oil is off to the races? The Dow up 300+ at midday. Am I catching on yet?

    • Mr. Knoss says:

      That’s why the protests are levitating!

      Lisas2020 has it right, COVID did not cause this, the governments response caused this.

  3. Lisa2020 says:

    The COVID-19 did not cause any of this. The decisions to shut down the functioning activities of the majority of citizens by a few decision makers with perceived power is what created these charted results. There is a real big difference. Actually a whole lot of citizens could be thankful.. They need to just continue to recognize they really can’t use, and don’t immediately need a whole bunch of stuff, that does NOT benefit any of them. It may be a difficult time for a while, but once the boycott that they did NOT create rolls through the real economy, then perhaps a few of them will be able to BUY OUT those few that created the whole mess.

    • lenert says:

      People were cancelling dinner reservations before any official state shutdowns.

    • Not sure who that will work out in energy. Neither Covid nor storage constraints caused that problem either, and my guess is some storage was held off market in order to sell futures contracts and nail those cornered buyers.

  4. polistra says:

    The global surgical gown recall hasn’t been in the news. Coincidence or not? Any time you see event X happening just before a closely related event Y, it’s worth asking who benefitted from X, or who used X to help trigger Y.

  5. Anonymous Coward says:

    Really @Lisa2020, “a few decision makers with perceived power” are the boogeyman here? If that’s what you think, you have little idea how modern society actually works. Governments at all levels, starting at the municipal level and working up through county, state and federal, have had a pandemic plan off to the side for many many years. They probably paid someone many years ago to put together the plan. They probably thought they would never have to use it. The lockdowns are straight out of the playbook for a public health crisis pandemic that they pulled off the shelf. The pandemic was the match that set the economy aflame, but the tinderbox that has been waiting for a spark is the result of decades of poor fiscal and regulatory policy, combined with a cascade of over-leveraged participants flying too close to the sun. Maybe it’s about time that the population recognizes that the economy is not sacrosanct and buying your way to contentment is a fools game.

    • Tim says:

      Yes, but…..

      If you have an economic model that depends on debt, it’s fine for the first however many iterations…. or something like that.

      That is until strong challenge to the existing paradigm, like coronavirus, happens and you then see that those who should be overseeing the economic response are bang out of ideas.

      Their credibility then wanes and what follows is fear driven tribalism until the next ‘credo’ moves in to fill the vacuum.

      Buy popcorn, watch and wait…

      • rhodium says:

        Any economic model that produces value for humans by human effort (not yet at the robot ai revolution) would take a huge hit if you tell everyone to stay home and suddenly a bunch of people can’t work. It’s not just the modern paradigm. You can’t consume what isn’t first produced. I mean money may shoot out of the federal reserve and into the treasury at will, but a dollar isn’t bacon. Someone somewhere has to deal with a pig. If they shoot the pig and stay home, they can’t sell you bacon, and you won’t have bacon to buy. I find thinking about the economy is much easier if you leave money out of the picture.

        Anyway, but yes, we do have a load of bureaucrats and economists that say debt is good while patting their bellies, making no gesture towards the fragility it builds into a system, whether that be a household’s finances, a government’s, or a corporation. The debt can be repaid but not at the value it was borrowed at. That’s why I am perpetually amused about who is dumb enough to keep buying all this debt.

      • Ed says:

        Yes, the debt house of cards has to come down.

        When will the Fed be forced to raise rates? How can you get runaway inflation with so many unemployed??

        Maybe the more likely mechanism would be a lasting demand crash that robs companies and governments of the free cash they need to service even lowish interest debt.

    • Tim says:

      Same principle applies to public health medicine.

      Sorry, but it’s true.

    • Endeavor says:

      Maybe it’s about time that the population recognizes that the economy is not sacrosanct and buying your way to contentment is a fools game.

      If it were only so. The last 4 generations have been bred to consume and will struggle enormously.

    • Nick says:

      Anonymous Coward,

      Her point is the government tyrannically overreached and overreacted and is STILL overreaching. ALL the medical models were not just wrong but COMPLETELY wrong. These politicians and bureaucrats and government doctors need to be held accountable. They should be literally yanked out of their positions and their livelihoods ended. This is a situation that will take DECADES to recover from. Instead of a slow, draw down and languishing economy we had a sudden implosion. This has further put a nail in the middle class coffin and exponentially increased the size, scale, and scope of government. And whatever pandemic plan you claim these ivory tower dumb fuks had in place has been a massive failure as usual.

      • sunny129 says:

        Within the next 4-6 weeks we will know the results of that ‘over reaching -clamp down and the again the consequences of early easing of those restrictions.

        The corona virus is more patient than people who are itching to go back to pre-corona days, with guns and public protests! The NEW normal will be forced upon us by the virus if one like it or not! you cannot ‘vote the virus’ OUT by coming November!

        • Paul says:

          In the early stages of the virus in China we saw pictures of people who had collapsed in the streets and I wondered how could that be happening?
          Well recently they discovered that people as susceptible to getting strokes so this was what we were seeing earlier from China. I listen to the national radio in Canada extended coverage in the a.m. and a few days earlier it appears to me that simple diagnostic symptoms are not properly described and the medical staff have to figure out everything on the fly. There is no organized body to compile the latest research, articles, early studies to even try to get a handle of what is really happening so they can have some organized plan.
          Now the scientist are coming up with a plan the test the poop in the sewage system to gauge the extent of disease spread and use sniffer dogs and aerosol analyzers to detect disease presence.

      • Fat Chewer. says:

        It is my belief that anyone blind enough not to see A GLOBAL PANDEMIC is the dumb “fuk” who lives in an ivory tower.

  6. Tim says:

    The healthcare comment was telling.

    You can almost hear the conversations to their suppliers

    “WTF are you doing…..? We’re say here holding our (insert phrase, say dangle berries and gigglestick) waiting for you guys to sort yourselves out!”

  7. Michael Engel says:

    ISM plunge thanks to doll face Xi. China doubled down during covid19 crisis.
    Six Cialdini principles.
    1) Reciprocity : China sent a fleet to intimidate. US sent their fleet
    and B1, B2 & B52 to protect the region.
    2) Scarcity : new orders that Chinese factories will not get.
    3) Authority : HQ.
    4) Consistency: HQ.
    5) Liking : US still like premier Xi, but we are not happy with him lately.
    6) Consensus : many other nations believe that China caused the ISM plunge. They switch to our side. US have many friends all over the world.

  8. WES says:

    Got to give Wolfe credit for not running out of red ink to draw “vertical” straight lines!

    • WT Frogg says:

      WES : Wolf liberated some from the Treasury Dept and the Fed……. they’ll never notice. Lol.

  9. michael says:


    At what point do we see significant state and local government layoffs? Newsom’s recent announcement they needed Federal assistance to pay unemployment is quite a tell. Supposedly California had a huge surplus. Perhaps that was just accounting tricks. It seems like the state and local governments need to stop the bleeding soon. I saw in the news that San Jose just furloughed 1000 part time and contract workers. However that has to be just the beginning.

    • WT Frogg says:

      michael :

      Federal assistance to states will be doled out as follows :

      Red states good…………….. unlimited aid.

      Blue states bad……………… Federal purse will be tighter than a bull’s

      backside in fly season as we say down on the farm.

      IIRC by law the states can’t declare bankruptcy……..that would require a new law from Congress and a signature from the occupant of 1600 Pennsylvania Ave. Chances of that are about as good as me winning the Irish Sweepstakes.

    • timbers says:


      The internets say state locals don’t deserve bailouts – like Wall Street, buyback corporations, junk bond junkies, and the rich do – because “it’s their fault.”

      And if you read some comments here, state and locals don’t do anything anyways and they hire their own police, teachers, fire departments, build their own roads, libraries, parks, etc, so what’s the bid deal?

      • timbers says:

        Oh, and water and sewer, and trash collection. Apparently, some here do that for themselves too, so we don’t need state and local governments.

      • Cas127 says:


        “state locals don’t deserve bailouts”

        Actually, the general political consensus is that states/locals will get C19 related assistance…but zero assistance for the multi-decade political vote buying scam that is public sector pensions (which can sort their own problems out via internal redistribution from highly paid pensioneers to lower paid pensioneers, to achieve some reasonable median pension compensation resulting in little to no actuarial shortfall).

        With the rise of the internet, the vast majority of Americans now know too much about insider political bullsh*t to personally sacrifice for scams like the one Illinois tried to pull (which was denounced even by some Illinois residents).

        If you think the pending Fed programs are bullsh*t, how can you defend the political class bullsh*t?

        • timbers says:


          Actually, the consensus you speak of my exist only in your head.

          Because if were a consensus, it would have already passed.

          But it didn’t pass. It didn’t pass even when the folks pretending to be in favor of state and local aid held the upper hand to get it pass, they immediately folded. Because, perhaps, the folks pretending to be in favor of state and local aid, were in fact NOT in favor of it.

          And now, the pretend supporter of state and local aid is speechifying state and local aid precisely at the moment she knows she has the least chance of making it happen.

          See a pattern, do you?

          As to:

          “but zero assistance for the multi-decade political vote buying scam that is public sector pensions”

          What’s wrong with politicians courting votes? Isn’t that their job? If we can bailout Jerome’s rich friends with impunity, I suspect there is in fact NOT ZERO support for bailing out the sacred, holy, sacrosanct, Godly contracts bestowed upon working folks (words of the Supreme Court regarding contracts owed to rich people and corporations), but in fact more than what’s inside you head.

    • Wolf Richter says:

      This mess came so fast and so hard on so many levels that no one can figure out how deep the fiscal damage will be. Revenues (sales tax, income tax, etc.) are collapsing just as expenditures are exploding.

      California had over $3 billion in its unemployment insurance fund before the crisis. That money is now gone. It took California something like three or four weeks to process the first 3 million unemployment claims. Then it took a little while before the first payments were actually made. So… 3 million claims x average weekly payment… I’d say that $3-billion fund lasted just two or three weeks of payments at the current rate.

      Going forward, the idea will be to borrow ourselves out of trouble. But states are not supposed to have deficits. The Fed has said it will provide liquidity for the states. That hasn’t shown up on the Fed’s balance sheet, but will pretty soon. The idea is to avoid layoffs in the public sector, just like the government is paying companies to avoid layoffs (doesn’t seem to be working though).

      • MCH says:

        Didn’t California just tap the Feds for a loan?

        I have to say, Brown did a good job in building up the reserves, but the truth is, no one saw this coming. Newsom just gotten flattened by this. Otherwise, he might have continued with the fiscal policy of Brown, well, probably less conservative, but he’ll still have had a rainy day fund.

        • Wolf Richter says:


          “Didn’t California just tap the Feds for a loan?”

          Not the Fed, but the US Treasury Department to fund unemployment benefits. Other states are lining up too.

        • VeryAmused says:

          “Not the Fed, but the US Treasury Department”

          Do we even need to delineate anymore?

        • Cas127 says:

          “no one saw this coming”

          If that excuse does not fly for buybacking corps, why should it fly for the vote buying, tax farming political class, armed with guns?

          Perhaps if the political class focused on effectively running its most basic functions, rather than endlessly pouring out public resources into thousands of kickback machines, the reservoir of resources to deal with crises would be much, much greater.

        • MCH says:


          I was referring to CA government. Not the companies. CA has its share of problems, but no one could have predicted a pandemic would explode the unemployed numbers.

        • Cas127 says:

          “no one could have predicted a pandemic would explode the unemployed numbers”

          What did political leaders (at every level) think that a *pandemic* would do? Risk mgt and emergency response are their core functions, unlike the majority of gvt activity – which is engaged in to purchase votes, not improve society.

          You could just as easily say that corps could not possibly foresee the wholesale shutdown of entire industries nationwide and therefore their buyback activity should be held harmless.

          That position doesn’t fly on this site, and I see no reason why it should fly for the political class either.

        • timbers says:

          Cas127, the difference is, that government function is ESSENTIAL. Corporations and their buy backs are NOT essential. And why do disparrage politicians buying voters? That’s what they do. It’s their job. It’s called Democracy.

        • cas127 says:

          “government function is ESSENTIAL”

          A large percentage of gvt expenditure is inessential, vote buying bullsh*t that does little to nothing (or worse) for the broader taxpaying population (vs. a tax eating political class that sees its own crooked supra-median compensation as “essential” and its vote selling betrayal of the public trust as “democracy”)

        • Saltcreep says:

          Lots of people have seen this coming from a mile away, MCH, as I’m sure you’re aware. Pandemics are inevitable occurrences, as are other sorts of crisis that we don’t take into account either. What if e.g. the next Big One that California has been waiting for hits next month and flattens more than just Newsom?

          The problem is that the build up of systemic slack, emergency supply chains and real capital reserves with which to weather such crises is totally absent, as it detracts from the bubbles we’re blowing elsewhere in our economies. Instead we’ve been ramping up debt to encourage us to consume ever more capital ever more rapidly, as our perverse wealth measures use capital consumption as the yardstick for measuring our success, rather than capital preservation and accumulation.

          The issue isn’t that experts on fields such as e.g. medicine and supply chains can’t foresee these risks, the issue is that those who can do something about it don’t want to see them. It’s all about doubling down, levering up, and crossing fingers and hoping that nothing bad happens until it’s Somebody Else’s Problem.

        • VintageVNvet says:

          Gotta Agree With Cas on this; while there was a time in my youth when the local and state guv mints did essential and only essential services, including water and sewer, roads and first responders, it, guv mint, has gotten totally out of hand in the last several decades ( 3 to 8, depending on where ya are ) and needs to be reined in sharply, as you would a run a way horse, etc.
          Some call it ”nanny state”,,, some call it ”creeping socialism” ,, but no matter how or what it’s called it needs to be reduced back to essentials, and let the NGO and completely private groups that want to do so, regain / replace guv mint again.
          Otherwise, as has been noted often on this site in general, USA is going to be ending soon, to detriment of democracy and the freedoms that are even now paramount.

      • BuySome says:

        States do have a deficit. This nation is a collective of United States, so the federal deficit is the combined obligation of all states against their assets in union, and ultimately from each. Don’t forget this…”The power to tax is the power to destroy”…it also applies to any burden placed on the states from above. And the states hold the same claim over property of their citizens by way of tax powers. Collecting the payment could be far easier than when they had to come get your chickens.

      • polecat says:

        Why should the public sector receive ANY recompense, when the very mopes who are facing, through pain of forfeit, via government (public) lien, to pay up for fees, assessments, property taxes, and the like … when said mopes .. through absolutely no fault of their own .. are finding THEIR livelyhood obliterated by Govenment fiat, dictated at all levels, from top to bottom ??

    • Dan Romig says:

      I just had a conversation with my next door neighbor who is a city councilman in Minneapolis. Hennepin and Ramsey counties got $212 million and $96 M respectively under the CARES Act, but Minneapolis and St. Paul got zero dollars directly.

      I asked if the Council had any input on the allocation of the monies going to Hennepin county. He answered, “No. We’ll see how things move in the next couple of weeks, but if nothing comes through, we’ll have to have major cutbacks all over the place.”

      Obviously, the city has to spend money on a lot of different things, but tax income is way down as so much is closed. Governor Walz has decided that up to $667 M of the state’s $2.2 billion federal aid can go to municipalities. His budget commissioner refers to it as, “That’s the $667 million question.” as to when and how the money will be distributed.

      If Minneapolis had 500,000 residents instead of 428,000, we would have gotten cash directly from Uncle Sam under the rules of the CARES Act.

  10. AlbieOK says:

    Jeez. Think I’ll head over to ZH for some sane takes on the economy and markets…?

  11. timbers says:

    Oh boy. With all these lines going to heck in a straight line, just watch Mr Market rocket to 40k on the slightest uptick.

    If I went on the Tee Vee and said I was going to break the law, I suppose I might get arrested.

    But Jerome doesn’t have to worry about getting arrested. He’s giving $trillions$ of free money to his rich friends.

    Well, at least state and local governments might go bankrupt (and not just the ones with pension problems).

    But then they should go bankrupt because “it’s their fault.”

    • Jdog says:

      Public sentiment is turning against the Feds protection of big wealth at what may be the beginnings of revolution… Misery loves company, and the people may begin going sideways if the wealthy continue to be protected while the people suffer…..
      If push comes to shove, the government will sacrifice the wealthy to maintain order. That is exactly what they did in 1929.

  12. SocalJim says:

    Not a collapse … just a stall … with significant inflation.

    Did you see today’s WSJ? “Why Home Prices Are Rising During A Pandemic”.

    Have you noticed rising grocerey store prices? I sure have.

    • Wolf Richter says:


      There is lots of demand for groceries since consumption of groceries shifted from restaurants to supermarkets.

      But demand for housing has plunged.

      And if you had ACTUALLY READ THE WSJ ARTICLE rather than just the misleading headline, you would have seen that this was about MARCH closings, which are JANUARY and FEBRUARY deals and thus predate the lockdowns.

      The whole article was this kind of bullshit … talking about January and February business, and in the headline it seemed it was about April business. If you just keep reading headlines, you’ll keep getting trapped in bullshit. This was a propaganda piece placed in the WSJ. The “reporter” likely got paid by the industry to do this. I get this shit in my email all the time, from all kinds of industries and companies, a lot of it through PR firms.

      • VeryAmused says:

        Reading past the headline may crush his narrative.

        We can’t have reality creeping in to our delusions now can we?

      • Trinacria says:

        Thank you Wolf. I just love it when you “confuse” some people (like Jim) with FACTS AND LOGIC !!!

      • SocalJim says:

        Demand is down … true. But, the supply is also down. So, the buyers and sellers are in balance. Nothing to see here.

        • Trinacria says:

          Wondering if there is some kind of 12 step program to help out with this…

        • Jdog says:

          And foreclosures are getting ready to skyrocket. This will make 2008 look like good times…..

        • Forbearance has locked the market to new home buyers. New buyers would cause a drop in prices and that would set off a sh**storm. Together with talk of negative rates the gimmick did jack up the REFI market. One more case of screwing over the real economy to support the fake economy and putting a bid under housing, in order to keep all parties whole.

      • Cas127 says:

        “a lot of it through PR firms”

        Usually populated by ex-journalists (who have access and contacts at MSM outlets)

      • Jdog says:

        Housing demand was more speculation than need for places to live. The speculation has now been paused to see what happens next…

      • Jon says:

        MSM has been pumping the bullish case for real estate along with so called chief economist from Zillow/Redfin/etc that so what Pandemic has caused millions of job loss, they see minimum impact to home prices in 2020 and per them it may even eek out some gains :-)

        • timbers says:

          The Zillow says my house has never been worth more than it is now. I like the Zillow. The Zillow is smart.

        • Wolf Richter says:


          “The Zillow is smart.”

          Zillow loses a ton of money. Zillow is getting killed on its iBuyer program and is stuck with houses it bought at too high a price and now cannot flip. But Zillow sure is amusing to look at for entertainment.

          The only way you find out what your house is worth is by selling it and closing the deal.

    • Jdog says:

      Explain how you have inflation when money is being destroyed at 10 times the rate it is being printed……

      • Ensign_Nemo says:

        Most of the inflation that is caused by the Federal Reserve adding huge amounts of money into the financial system shows up in finance rather than the “real” economy.

        Bonds prices are at record highs, even though the federal government is going to add at least $3 or $4 trillion dollars in debt this year. It could be more, as we are only four months and a week into 2020, and it’s quite possible that number will go up.

        Normally, if a government is borrowing around 15-20% of its GDP in one year, the law of supply and demand will make government bond prices decrease as interest rates rise, but the Fed is essentially monetizing this debt. Infinite supply is even greater than enormous demand.

        Stock prices are still close to maintaining their historically high prices – the S&P is down about 15% from its record high even as the economy tanks. This is a relatively minor drop under the present economic conditions, and it reveals that the stock market is decoupled from the real economy for as long as the Fed keeps pumping liquidity into it.

        If the flood of money from the Fed was flowing into the real economy, then banks wouldn’t be shutting down virtually all business loans that aren’t backed by government guarantees.

        Main Street is left high and dry, but Wall Street is still afloat upon the sea of liquidity issued by the Fed.

  13. Joe says:


    I find politicians are far too much believing that everything will change better than what is currently is happening in reality.
    Both the too little help and too late to bring help will bring reality crashing forward very shortly as programs run dry of added credit.

  14. Bobby Dents says:

    The late 19 spike was probably caused by Covid 19 as well. The business elite knew by November and started ramming in orders.

  15. gorbachev says:

    Watching Sweden and Hong Kong .Hk seems to have figured it

    out an if it works out in Sweden it would give the U.S. a

    proven template.Having 50 states with differing agendas and a

    President who lost the popular vote thus denying him legitimacy and

    political capital has been a tough road to hoe.

    • Wolf Richter says:


      Hong Kong reported that Q1 GDP plunged by 8.9% year-over-year, the worst plunge on record. In Q4 2019, GDP had dropped 3.0% and in Q3 2.8%. This is terrible.

      Sweden reported Q1 GDP of 0.5% growth year-over-year. But Q1 only goes through March, and most of Q1 was not impacted by Covid-19.

    • nicko2 says:

      May the waves upon waves of bankruptcies commence.

  16. Tom Stone says:

    That will buff right out, BTFD, There’s never been a better time to buy (Or sell) a home!
    Where did I put that last tube of glue?
    Time for another trip to the hardware store…

    • SocalJim says:

      In Today’s Wall Street Journal: “Why Home Prices Are Rising During A Pandemic”.

      • VeryAmused says:

        You can ignore reality but you cannot long ignore the consequences of ignoring reality.

      • Dan Romig says:

        I get to see my local market in action as a home across the street has a for sale sign and should be listed within a day or so. It is very similar to the home to my south that was listed in mid-March and sold in two days at slightly above asking price.

        • Jon says:

          IN my hood in southern California, I can see homes sitting longer with multiple price reductions.
          These are million dollar or above homes.
          Inventory is super low..

        • Paulo says:

          We are in the process of getting ready to sell a home due to a death in the family. Worked there most of today.

          This is on RE rocketship Vancouver Island. Info I have gleaned from research: many properties pulled off the market, but smaller inventory reflects just a 3% drop in prices.

          I have one buyer circling, trying to dodge RE commission. However, dealing with a death, moving stuff out, Covid showing issues, etc etc has led me to conclude the RE commission will best money a buyer could ever finance. I have sold privately before, but this market takes local knowledge imho.

          Spec houses still being built as construction has not been shut down in BC one iota.


        • Dan Romig says:

          Condolences and all the best to you and yours Paulo.

      • Jdog says:

        Is that right under the article about how to borrow your way out of debt?

  17. MCH says:

    This is not unfathomable… it’s already been foretold by the market and Wall Street.

    The market is a forward looking mechanism (so we’ve been all told), all this bad economic news has been baked in by the crash in March. CAVU, everyone, which means ceiling and visibility unrestricted. So, nothing but open skies for stocks from here out. (Well most stocks anyway)

    V shaped recovery, it’s already on the way.

    Ha ha ha ha, I’m sorry, I couldn’t even type that short blurb with a straight face.

    • Jdog says:

      The market is blind, deaf, and dumb. The market has never predicted anything ever. It is a game of musical chairs with trap doors under all the chairs that drop away all at once…..

  18. VeryAmused says:

    ‘Murica, $%#@ ya!!!

  19. Just Some Random Guy says:

    There is a word that is always missing from these sorts of articles. The word is TEMPORARY. This was a 1-2 month event. That event is over and things are going back to normal.

    Think of a hurricane that stops the economy of FL for a week or two but nationally and instead of 1-2 weeks, it’s 1-2 months. But nobody ever sets their hair on fire because FL’s GDP falls by 50% during the hurricane. Why? Because everyone understands it’s a temporary thing and as soon as the hurricane is over things will get back to normal.

    Outside of NYC and a couple of other areas, the ‘Rona is ancient history. I mentioned before in my county the total number of deaths is in single digits. It’s a non issue for 99.8% of the population. Life is back to normal, as if nothing happened.

  20. IdahoPotato says:

    Abridged version: “It’s all a Deep State hoax. Pandemic is done.”

    I read the comments here after several days. And immediately regretted it. I will limit myself to reading the main post and getting the heck out of here.

  21. David Hall says:

    Florida reopened stores and restaurants at limited capacity yesterday in an effort to produce economic growth.

    We do not have enough N95 masks or Remdesivir.

  22. Michael Engel says:

    ISM vertical plunge, but “Treasury General Account” in the F.R.
    is vertical up like never before, reaching $1T.

  23. Stuart says:

    Trump supporters personified. We are doomed. How can anyone still support a guy who tells us to shoot up Lysol and drink bleach? Or was it the other way around ? Oh, I forgot. This is all China’s fault, says Fearless Leader.

  24. Augusto says:

    Its spring here in Calgary, Canada and the for sale signs are going up all over. Haven’t seen any sold signs yet. Here its oil, so its going to be rough. I can echo a lot of the comments here. The one I notice is that all the government workers are furloughed on 100% salary and benefits, while the private sector workers are a combination of lay offs, (reduced) unemployment, closed businesses, etc…Empty buses and trains, for a system already highly subsidized. This is going to be a disaster, we have already hit the iceberg, and once we come off it, we are all going to find there is no bottom and down we go. No V-Shape recovery here.

  25. SaltyGolden says:


    Any thoughts on a virtual meetup Q&A session? I think the one year anniversary of the first meetup in SF is coming up soon.

    Would be cool.

  26. DO says:

    “OK I saved y’all the trouble, now for some meaningful comments…”

    No. Now please comment on the misery this lockdown will probably cause (if you think it will) and about how many people will die as a consequence of that. Or the resulting increase in addiction, domestic abuse, suicides, crime, etc, that will result from that, unless we go back to normal in a few months.

    Of course, we might just keep printing our way to utopia.

  27. Escierto says:

    I read the comments after yours and there was really nothing to add. Why does this place start to resemble zero hedge? I stopped paying attention to ZH after it became troll heaven several years ago. I hate to see the same thing happen here.

  28. CCC says:

    So today I find myself wondering not about manufacturing but the service/food/ entertainment/airline/casino/cruise ship industries. How do you make a profit with half your customers due to social distancing? Do you double your prices? Will that crush your volume enough to not work? It’s going to be interesting.

  29. Tony says:


    I’m not sure you mentioned that medical workers are being furloughed nationwide also. It’s been in all local news and not in the mainstream.

    Seems funny, right? Lay off medical workers in a time like this. Just do a quick search on “hospital layoffs”

    Also covid-19 numbers have also been fudged due to govt grants to the hospitals of the “assumed” cases of covid-19 (They will deem a death covid-19 without even confirming if the person had it just to get the govt grant) I can confirm this. My wife is an ER nurse right now. Technically this means if hospitals are deeming deaths/cases to covid-19 that we should see a drop in death tolls for other causes of death, e.g. cancer, heart disease, etc. Time will tell. There’s a lot of dark money stuff going on without the general public even caring.

    • Ed says:

      Look at excess deaths. Compare this year’s feat count v the normal count.

      Over a large population, the virus death count
      should match. So far the official counts don’t cover the “excess death” count.

      What you describe might be true but the smaller factor compared to lack of testing of home deaths. But, yes, time will tell. We may be some time away from consensus.

    • Wolf Richter says:


      “Seems funny, right? Lay off medical workers in a time like this. Just do a quick search on “hospital layoffs” ”

      No, it’s not funny. The problem is that nearly all elective medical procedures have stopped and these places have shut down and their staff was laid off. Dentists are closed, staff laid off. Clinics are closed, staff laid off, etc. Why? Because the risk is that you get Covid-19-infected patients inside the clinic without knowing about it, and suddenly you have a huge problem on your hands.

      BTW, overall deaths have spiked way above normal in New York City and other cities where they have big outbreaks. That has already been established. No need to make up your own theories.

      • Cas127 says:


        Put out a link to the Yale study that posits “all cause” deaths being far elevated above baseline nationally, so that your readers can make their own judgment as to the thoroughness of that study and the solidity of its results (it is not a very long read).

        On the one hand, you have whatever assumed credibility a Yale professor carries and on the other you have omitted raw data and graphical presentations designed more to obscure countervailing data than to enlighten.

        It isn’t a slam dunk on either side.

        • Wolf Richter says:

          Here are the overall deaths by location, and how they spiked way above normal in some places that got hit the hardest, in easy to read charts. Look for yourself:

        • Cas127 says:


          Better than the Yale study (mostly because the raw data baseline is much more clearly presented) but there are still a number of issues…

          1) The main body graphs (more detailed than top-of-article graphs for some reason) do not use consistent time periods/number of yrs to arrive at baseline average all cause deaths – why?

          2) The primary source link that the NYT provides to EUROMOMO is non-functional.

          3) But some poking around on the EM site makes them look sufficiently legit and they have the virtue of providing the apparently raw/unadjusted baseline all cause data, which in its sweep should detect yr to yr surges caused by something.

          Note: Raw data/unadjusted baseline data avl is key, otherwise all seasonal/other adjustments cannot be verified step by step, a major shortcoming in the Yale paper.

          4) The EM site apparently tries to reconcile all the differing euro state cause of death methodologies, but it really isn’t crystal clear/detailed on this point.

          5) The only US data in the entire NYT article you cite is from NYC…there is zero data from any other US city or state.

          The point is not that there is no evidence that a dangerous new virus is out there, but rather the question is exactly how dangerous it is and why geographic variations are seemingly causing radically different outcome results – the latter being of major, major importance to wholesale shutdown strategies that themselves bring major consequences (including health) in their wake.

          The NYT’s article really has really nothing to say about the American experience, outside of NYC…the worst hit city by far.

        • Cas127 says:

          …And my point being that the Yale study tried to make sweeping US generalizations using more opaque data/processes.

  30. noname says:

    What side of Kornfield Kounty do you live on, neighbor?

    I included a text message I recently received—it must not have made it past the filter.

    Anyway, since the processing plants are deemed essential, I’m hoping Evonka, Jarhead, and Dawn Junior stop by the slaughterhouse to help out. Y’all come!

  31. CCC says:

    I’m closely connected to this and there is no mad hospital conspiracy. Almost all hospitals are in big trouble financially. And yes it is ironic. We basically told all hospitals to shut down all elective procedures – read this as joint replacements, heart valve replacements, spinal fusion, lots of radiology MRI/CT. Even Emergency Department visits disappeared because people were afraid to come. This stuff is what kept them in business because Medicare and Medicaid doesn’t cover their costs.

    So most hospitals not in NYC are basically empty. Yes they have a small portion of very sick, very dangerous covid patients which just drives up costs and doesn’t come anywhere near replacing all the elective procedures revenue they gave up.

    Before covid rural hospitals were teetering. This will put many more out of business.

    • Jdog says:

      Hospitals will be bailed out. It is a matter of national security. This virus thing is not over. They are expecting at least 2 more rounds of this thing to hit. One this fall, and then again the following year. And who knows what the Chinese are cooking up for the next act?

      • Even private hospitals will get bailed out? Hospitals laying off workers, and which didn’t provide adequate protection, after reducing the size of the IU to save money? The same hospitals which are breeding grounds for super bacterial infections, because they don’t do proper sanitation procedures? Perhaps there is a private prison with a private hospital inside somewhere which also needs to be bailed out?

    • OutWest says:

      I look at the raw data of hospital data in my state on a daily basis.

      Most medical professionals are unemployed right now but fortunately, we are surrounded by ‘well educated elite’.

      Rural hospitals are being dismantled, today.

      Lack of business.

      But in my state, after all, golf courses were opened today. Hard to believe, I know.

    • Nicko2 says:

      Contrast to a country like Canada, where the Federal government guarantees funding to each hospital in the land based on capacity; all facilities have an operating budget that cannot fall, thus standards are maintained. This is the magic of universal healthcare.

      • BuySome says:

        Winderful…but this is not Star Trek and we do not live under the United Federation of Planets. Canada and the United States had a common history of believing in the benevolence of the King meted through his Parliament. We had cause to break with that, while Canada had a long transition to what they got. We like our head of state to remain subject to losing his should he begin to act like George the Third…something we have to test regularly. [And no one came here for opportunity…they were actually escaping from inopportunity at home.] So we are left with fundamental Constitutional this “medicine-for-all” ultimately National Defense and warranted under the power to raise armies, or is it General Welfare to be instituted under that clause. The latter part allows for public social actions (Socialism) without the threat of communism (more damn kings without controls). Both warrants have problems, but the second one is really tough to work with…opposing political forces have trouble finding concensus. Disaster usually forces a compromise, but are we there yet? There is no such animal as Magic…currency itself stems from the old King’s written order to deliver coin from the national treasury which is accrued by his power of taxation over people and lands….and this is reality, not fantasyland. IOU can be collected upon with force.

  32. Fat Chewer. says:

    You suck. I don’t think anything more than just observing your psychotic hero for five minutes is all it takes to want him gone.

    • Wolf Richter says:

      Fat Chewer,

      It seems (or at least I hope) you missed the sarcasm dripping from every pore of njbr’s comment.

    • Phil says:

      You missed his sarcasm, however it’s understandable since no imitation of a true Trump fanatic can actually seem more over-the-top than the real thing at this point.

Comments are closed.