Week 9 of the Collapse of the U.S. Labor Market: Still Getting Worse at a Gut-Wrenching Pace

Federal Pandemic Unemployment Assistance (PUA) for gig workers doubles initial claims under state programs. Here are the “Insured Unemployment Rates” for each of the 50 states & DC.

By Wolf Richter for WOLF STREET.

The moment the unemployment crisis stops getting worse and bottoms out would signal the beginning of a recovery of the job market. But instead, it’s still getting worse at a gut-wrenching pace.

In the week ended May 16, state unemployment offices processed 2.438 million “initial claims” for unemployment insurance under state programs, bringing the total number of initial claims over the past nine reporting weeks since mid-March to a mind-bending 38.6 million (seasonally adjusted). The claims reported by the US Department of Labor this morning were over three times the magnitude of the prior weekly records during the unemployment crises in 1982 and 2009.

But it’s even worse: 4.4 million initial claims with PUA.

These “initial claims” exclude the gig workers, self-employed, and contract workers who are now eligible to receive unemployment insurance under the special and temporary federal program in the stimulus package, called Pandemic Unemployment Assistance (PUA).

In the week ended May 16, an additional 2.23 million people (not seasonally adjusted) filed initial claims under the PUA program, up from the 850,000 that had filed the week ended May 9, and the 1 million that had filed in the week ended May 2. So in total, when regular initial claims (not seasonally adjusted) and PUA initial claims are combined for the week ended May 16, the total of initial claims (not seasonally adjusted) more than doubles to 4.4 million.

The number of “Insured Unemployed” spikes after last week’s calm.

Laid-off workers who filed an “initial claim” for Unemployment Insurance (UI) and state programs and who are still looking for a job a week later are added to the “insured unemployment.” The number of these “continued claims” spiked by 2.525 million to 25.07 million, having weeks ago blown past the pre-Covid-19 record of 6.63 million in May of 2009:

Last week’s “insured unemployed” were heavily revised down today to 22.55 million (seasonally adjusted), just 171,000 above the prior week. And given the enormous magnitude, the revised totals for last week and the prior week look nearly flat in the chart below. However, today’s spike delayed any hopes that the bottom of the unemployment crisis was in:

And it’s even worse… with the PUA: 27.3 million.

These “insured unemployed” are those in the regular state UI programs and do not include the PUA claims. Including all types of claims, not seasonally adjusted, the total uninsured unemployed combined surged to 27.3 million.

The 28 states with the most “initial claims.”

California is back in first place, after having dropped to third place last week behind Georgia and Florida. During the early phases of this crisis, California’s weekly initial claims exceeded 1 million. These are the regular initial claims and do not include PUA claims:

Top 28 States, Initial Claims in the week ended May 16
1 California 246,115
2 New York 226,521
3 Florida 223,927
4 Georgia 176,548
5 Washington 145,228
6 Texas 134,381
7 Illinois 72,816
8 Pennsylvania 64,078
9 Michigan 54,460
10 Kentucky 47,036
11 Ohio 46,594
12 North Carolina 45,974
13 Virginia 45,788
14 New Jersey 41,323
15 Massachusetts 38,328
16 Maryland 34,304
17 Arizona 32,295
18 Minnesota 31,529
19 Wisconsin 31,314
20 Indiana 30,311
21 South Carolina 29,446
22 Louisiana 28,843
23 Tennessee 28,692
24 Missouri 26,029
25 Connecticut 26,013
26 Alabama 24,528
27 Oklahoma 23,880
28 Oregon 22,281

The “Insured Unemployment Rate” per state

The national “insured unemployment rate” for the week ended May 9, also released today, jumped to 17.2%, from 15.5% in the prior week. For comparison, the record in the pre-Covid-19 era was 7.0% in May 1975.

The “insured unemployment rate” for each state, also released today, lags one week behind the national average. The table below shows the “insured unemployment rate” for each of the 50 states and Washington DC in the week ended May 2. There are 38 states plus Washington DC now with a double-digit “insured unemployment rate”; three states sport a rate above 20%:

Insured Unemployment Rate by state, week ended May 2
1 Nevada 23.5%
2 Michigan 22.6%
3 Washington 22.1%
4 Rhode Island 19.9%
5 New York 19.6%
6 Connecticut 19.3%
7 Mississippi 18.8%
8 Vermont 18.8%
9 Georgia 18.5%
10 New Hampshire 18.0%
11 Pennsylvania 18.0%
12 Hawaii 17.8%
13 New Jersey 17.8%
14 Louisiana 17.2%
15 Alaska 16.5%
16 California 16.4%
17 Oregon 16.2%
18 Massachusetts 16.1%
19 West Virginia 16.1%
20 Minnesota 15.0%
21 Maine 14.5%
22 North Carolina 14.1%
23 Ohio 14.0%
24 Kentucky 13.4%
25 Montana 12.9%
26 South Carolina 12.9%
27 Illinois 12.8%
28 New Mexico 12.6%
29 Iowa 12.4%
30 Florida 12.1%
31 Oklahoma 11.4%
32 Delaware 11.3%
33 District of Columbia 11.3%
34 Alabama 11.2%
35 Wisconsin 11.0%
36 Tennessee 10.5%
37 Virginia 10.5%
38 Arkansas 10.2%
39 Maryland 10.0%
40 Colorado 9.8%
41 Texas 9.6%
42 Missouri 9.5%
43 Indiana 9.4%
44 Idaho 8.9%
45 North Dakota 8.7%
46 Kansas 8.6%
47 Arizona 7.9%
48 Nebraska 7.1%
49 Wyoming 6.6%
50 Utah 6.2%
51 South Dakota 5.6%

“Insured unemployment” are is different from the unemployed in the jobs report.

In today’s report, the number of “insured unemployed” under all programs, including PUA, of 27.3 million is the number of people with continuing Unemployment Insurance.

By contrast, the number of unemployed in the monthly jobs report is derived from household surveys and does not reflect UI. The household surveys that were collected in mid-April became part of the jobs report released on May 8. For that period in mid-April, the number of unemployed surged to 23.1 million. But not all of the people who are out of a job and are looking for work, as identified by the household survey, receive UI benefits. So the household surveys, when they catch up, should show an even higher number of unemployed than the 27.3 million of “insured unemployment” reported today.

Ecommerce sales spiked to record. But mall stores got hung out to dry. Walmart’s ecommerce sales, though still woefully behind, shot up 74%. Read… During the Last Financial Crisis, Even Ecommerce Sales Plunged. Not This Time

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  177 comments for “Week 9 of the Collapse of the U.S. Labor Market: Still Getting Worse at a Gut-Wrenching Pace

  1. FinePrintGuy says:

    Last week the rate was 27.7% in California. This week its 16.4%. That’s really some volatility there.

    • Wisdom Seeker says:

      Hopefully as some states return to work, the numbers will come down. But there’s no way they fall as fast as they rose.

    • Wolf Richter says:

      Yes, as I pointed out last week when I reported the 27.7%. This near-real-time data jumps around a bit.

  2. Phoenix_Ikki says:

    Like a bad joke that never ends, the market actually try to shoot up again this morning. It’s still a long day but wouldn’t bet that it won’t close up again almost weeks after weeks on the day when these massive numbers get released. If this trend doesn’t significantly slow down or reverse, we’re looking at 40M next week. That’s a heck a lot more than the entire population of most of the countries in the world, yet we have a complete broken government that are still fixated on making sure the elites will eat first before everyone else as if another round of $1200 is gonna save the majority in need from this nightmare. What a pathetic joke.

    • M says:

      Amen. The massive, public corruption is most evident in the bankster-owned, “Federal” Reserve printing trillions to gift more funds to its banksters.

      Our key debt to GDP rate is now way over that of prior, failed economies. Our federal liabilities exceed $200 trillion, not even counting state and local liabilities, which will require federal bail outs. We are now in Zimbabwe-type economics with politically-connected parasites dividing public assets among themselves.

      • M says:

        To clarify, recklessly run, failed economies in admittedly corrupt countries (e.g., In Latin America) still are better run than the banksters are running our country: they do not have enormous, hidden liabilities as we do in the US, so economists are opining as to their debt to GDP ratios being unsustainable WITHOUT having to count any hidden liabilities. Our hidden liabilities of over $200 trillion far exceed our disclosed debts, not even counting the future, foreseeable trillion in liabilities from future bailouts to be gifted to the banksters from their “Federal” Reserve due to their $211 trillion in derivatives gambling.

    • Wisdom Seeker says:

      Phoenix, no clue where you’re getting 40M LOL. Did you read the graphs?

      The market is, theoretically, pricing in the future value of all cash flows from each stock. With interest rates low, much of the future value is way out there – 10-30 years from now. The stock market can and will revive long before the jobs market, as long as the stock market sees the longer term turning out ok.

      To make sure everyone eats, we need the UE benefits to continue and then the jobs to come back. Dead companies don’t hire, so maybe it’s not all bad that they aren’t getting zeroed by the market. (Not that I don’t wish quite a few would be reborn as better entities…)

      • Phoenix_Ikki says:

        Please read what I wrote

        If this trend doesn’t significantly slow down or reverse, we’re looking at 40M next week.

        I said 40M possible next week, 38.6M so far from report released today, another 2M next week based on current trend there’s your 40M, not that difficult to add up the numbers.

        • Wisdom Seeker says:

          Ohh, you’re adding up weekly “initial” claims and thinking that sums to something meaningful. It doesn’t IMO. Some people are forced to file and refile “initial” claims due to quirks in their employment. They aren’t all “newly unemployed”. Furthermore, some of those who were “initial claims” a month ago now have new jobs.

          The “continuing claims” number is the one that matters. It’s stuck at 20-25M. It’s not going up. And the 25M this week is a data error (inappropriate seasonal adjustment algorithm)… after revisions it should be pretty much same as last week.

      • Young Buck says:

        Wisdom Seeker, pretty simple math to conclude we’ll be at 40M unemployed next week. Were at 38.6M right now, we had 2.4M this week, pretty safe to assume they’ll be 2M claims next week. 38.6M + 2M = 40.6M :)

      • Shiloh1 says:

        Dead companies deserved to be zeroed by the market, especially those in the levered debt – stock buyback game. Competent competitors will take their place and hire.

        • Wisdom Seeker says:

          Don’t even need competitors. Just flush the bad debts and bad management and carry on with the part of the business that makes sense. And grow from that.

      • The labor market was tight before this happened, and in market parlance the loosening is beneficial to employers, and stocks get a lift. We no longer mention employees and consumers in the same breath, because people who “work” for a living are poor. The poor waste all their money on necessities. I want to disavow that BS about future value. If you follow Hussman you know what I am talking about. If you cared to think about future earnings you would pull your hair out and sell everything. The market goes higher on expanded money supply. The trend was a fixture before GFC. Investment banks leverage debt which is the vehicle for money creation, as Powell notes when he institutes “forward guidance”. Market wasn’t having any trouble without f.g., and won’t appreciably change one way or the other with it. The FED walked back the employment benchmark years ago. The point on employment is political, which is the glue which holds the central banking cabal together. The Yellow Vests are no threat, they are middle class malcontents, but get the poor moving, and things change in ways that threaten the power structure. American workers were underemployed before the crisis. This is why the FED did their town hall meeting yesterday. They like their heads right where they are.

      • NJGeezer says:

        Hello Wisdom Seeker,
        I have great respect for the work that you have done analyzing data about CoronaVirus over the last couple of months. Well done. However, i gotta disagree with your position about the stock “market”. It’s neither a market nor a casino. It is an absolute 100 percent rigged crooked game or horse race. Makes no difference which metaphor you choose. The whole claim of “forward looking” is a mere invention of the spinmeisters, to promote their BS further. The Fed Reserve Banksters have revealed their roles completely. Forget about the “dual mandate”, as this is patent Bullshit offered up for the news-following plebes. The Fed has one role, and that is to prop up the oligarchs and plutocrats as they rapaciously siphon all capital in the nation into their personal accounts, while they promote globalism, and unfettered poverty for the masses.

    • Stuart says:

      It’s worse than that. Nobody is talking about the psychology of
      “ recovery “. As long as they force a demand driven system on us there is little chance demand will recover at all in the short run. Those who are not broke will curtail spending in fear of becoming broke. With Trump “ leading “ the country we might as well all eat cake.

    • Noelck says:

      I love the Youtube video where the guy points out that the $1200 is actually our money that the government is gifting some of us.

    • sunny129 says:

      The market remains disconnected with the Economy on the ground and managed exclusively by Fed!

      Fed is the market! Fed slowly increasing the purchase IG corp debt! Did you get on that gravy train, yet?

  3. EEngineer says:

    And here in Oregon they still haven’t finished processing the backlog of initial applications either. My girlfriend has waited on hold for hours at a time to no avail…

  4. VintageVNvet says:

    Thanks for this clear and concise summary, with graphic demonstration of the very basic nature of the so called ”Un – employee – ment” industry in USA;
    what a fooking shame for every/each/all public servants, elected or appointed in the last 50 years or so, eh?
    IMHO, WE the PEEONS must insist on a Constitutional Amendment ASAP,,,,, ASAP as in BEFORE THE NEXT ELECTIOON
    ( combination of election and either cartoon or bufoon, take your choice) that will mandate a lot of things to advance the welfare of all of the peoples of USA, including, of course the oligarchy who must be either pooping their pants, or something similar about the approaching ”flash point(s).”
    FIRST,,, and perhaps the only one needed by the election,,, is that anytime a chart like this comes into play, not one dime shall go to ”companies” until 100% of WE the PEEONS are assured of enough $$ to feed our children, clearly NOT the case today., and, if you want to be really clear on the subject, NOT the case going back many centuries,,,
    Sorry for getting a bit long winded Wolf, but,,,

    • Jeff says:

      You don’t have enough cash to feed your children? Really?

      • That’s okay. Wall St will eat them…

        • Thomas Roberts says:

          Not if, I can manage to eat those on Wall Street first. I imagine it’s good eating.

        • polecat says:

          So mr. Roberts, it seems as though you’ve found a taste for Viperous reptiles .. no doubt, an acquired one!

      • BuySome says:

        Actually, most of ’em don’t. They have e-credits which will ultimately allow a little Napolean to decide how many children, what they can select, when they can eat, and what they will think. And of course, where and what kind of job if and when it is permitted. Intermittent lockdowns are possible depending upon board unanimity.

    • R U Kiddin says:

      2 hit _hit?

    • Raging Texan says:


      you say you want to be “assured of enough $$ to feed our children”

      If you are looking for a govt to feed you, then why even bother with a Constitution? Why not just have a king or a committee in charge of everything? Would be a lot simpler.

      And why stop at food? Why not have the govt also provide clothing, medical care, safety, housing, transportation, spending cash, moral teachings and entertainment for the whole family? Then you could just relax all day knowing everything is taken care of.

      • Stuart says:

        Why not own and control the means of production and reorder society to serve the needs of those who create all wealth, the Working Class ?

        • Raging Texan says:

          ok Stuart you are asking me to replace the current wannabe tyrants in power with a new tyrant (you) who will own everything and decide who gets what.

          How is it in my interest to support any tyrant?

        • Dave says:

          I can’t even begin to express my complete shock at the FED and MUNICHIN. They are KILLING savers. Mind you I voted for Trump. Mind you I can’t see anything worse than destroying the whole economic system, the system on which all of us rely to buy our food, house our families, and care for ourselves. It’s my money, and the capital I earned THEY use for 0%. It’s a crime and should be called as such.

      • VintageVNvet says:

        What I was hoping was coming across from what I wrote above, though maybe not so clear to those not considering these charts in the context of the trillions and trillions of taxpayer money going to the ”companies”,,, was that family welfare should come first, not last.
        As to your question of why stop at food,,, clearly, all of the items you list are available on the taxpayer’s dime already for every ”company”,,, including from ”sole proprietor” to the largest and most complex form of ”corporate company.”
        The point is, IF we are going to subsidize every company, we should subsidize families first… I hope that is clear enough?
        And, to be more clear, I am from the old school that says people should be taken care of by family first, and then church,,, as was the case in my childhood in the 1940-50s era before all these fancy financial shenanigans stole so much from the ”real” economy, etc.
        Although I have benefited (when totally blinded temporarily) from the ‘nanny state’ welfare industry, it was one of the worst and most painful experiences of my life so far, and nothing I would wish on anyone.

        • Raging Texan says:


          Here’s an amazing concept. End all the subsidies and benefits! All of them!

          If you want to support individuals, write a check yourself, it’s called charity. Stop stealing from me to give benefits to people i don’t want to support.

        • Petunia says:


          The state of Texas exists on oil subsidies and agricultural subsidies. Texas can always give the money back, but that’s how they got rich.

        • neplusultra says:


          It’s called living in a democracy. Don’t like your taxes going to benefits you don’t approve of? Tough shit. You’re in the minority and you can either move or convince enough voters to change it. Until then you’ll take it like you always have and will continue to jawbone on a website using internet infrastructure funded by taxes you cuck.

    • Tony22 says:

      We The People can help that process along by refusing to pay ALLl rents, debts, leases, fees, fines, registrations and taxes. Period.

      I want to see the Federal Reserve create enough trillions to hand directly to the people to allow working Americans without work to be able to pay their debts.

      • BuySome says:

        Borderline rebellion. Talk the talk, but walk the walk? Brick and bat in hand. Otherwise, ain’t got the guts, y’all lose your butts. Big choice to make, and they’re watchin’.

    • Noelck says:

      I believe Kudlow stated today that unemployment benefits would not be extended.

      Eugene Scalia(Labor Secretary) dishonestly threw up the number that 90% of the unemployed would return to their jobs once the economy re-opened.

      We can bail out the banks with trillions in 2008/2009. In the process making Jamie Dimon and Lloyd Blankfein billionaires when they directly helped cause the crisis. Now when the middle/lower class are hurting through no fault of their own we don’t want to help them because it may disincentivize them from going back to work.

      • rhodium says:

        Well in order to get things done, people kind of have to work. They can’t if they don’t find jobs to do though, and I think it’s not generally due to lack of productive capacity, but companies very cautiously hiring only in response to increasing demand. A recession and the resulting layoffs causes a huge loss of income and businesses see it as a huge loss of demand. This is why a lot of the recently employed won’t be going straight back to work.

        The govt thinks (mainly repubs who think economic clout = morality) giving money to businesses means they’ll be in a position to hire their workers back. This is highly optimistic of business behavior that expects them to act more like a charity even though many I’m sure will treat it like a cash prize. That’s why I say just keep giving Americans stimulus checks. Worst case it generates a little bit too much inflation, otherwise you’ll be fueling consumer demand to a point that hopefully actually forces businesses to hire back workers. Inflation also has the positive effect of diluting everyone’s debt load, since the system also is in need of a debt jubilee.

  5. Lance Manly says:

    S&P to 3500!

    • MonkeyBusiness says:

      Supposedly retail is leading the charge. That’s actually not a good thing. Retail generally gets slaughtered in the end.

      • Petunia says:

        I was out yesterday at a local mall which has about 50% occupancy. Almost all the stores still there were open. A few people were out and about but not many.

        Went into my favorite store there and bought something at over 80% off. It’s a chain store with a website, I’m hoping that the demise of other retailers allows them to survive, but I’m not confident.

        • Thomas Roberts says:

          Right now, I expect only the big box like stores like Wal-Mart, Target, Menards, Lowes, Costco, and Sams club to survive and thrive for most things. Clothes and groceries could have some more variety of stores. For clothes, there will be alot less stores than right now and a few big ones might arrive or grow to aquire the bulk of clothes transactions. I’m guessing something between a kohls and a TJ Maxx, but, exclusively clothes and accessories. There could be a handful of specialty clothes stores like sports, wedding, or the like, but very few brand specific stores.

          There’s the possibility that most cities will have a single huge clothes stores, bigger then current department stores with great variety and little other clothing stores.

          There’s also the possibility that Wal-Mart or Target could make a somewhat bigger store and account for a greater percentage of clothes transactions.

          I’m thinking of the typical under 100,000 people American city though. The big cities might maintain a greater amount of stores, but, there will still be a bloodbath, because, of how uncompetitive, most are.

  6. Jeremy Wolff says:

    Wolf, Illinois is classifying Uber drivers (and presumably other gig workers) in regular unemployment, not PUA. If other states have been doing this as well, than hopefully the PUA numbers will be very small.

  7. HR01 says:


    Many thanks for keeping score.

    One question: If the regular continuing claims are combined with the PUA continuing claims, where does that put the insured unemployment rate? Does the Labor Department not calculate this?

    Still no bottom in sight for unemployment. Vast majority of those who’ve gotten axed in service industries. Beginning Oct 1, we can expect a flood of unemployment claims from the manufacturing sector as the PPP grant restrictions end on Sep 30.

    • Wolf Richter says:

      The thing is, PUA is being kept separate from the state UI. So you can do your own math and get close. But the monthly unemployment rate by the BLS, when it finally catches up, includes them all.

    • Tony22 says:

      Don’t forget that “small business”- under 500 employed, PPP grant restrictions, and reasons to keep employees on payroll, end on July 1st.

      Add your Oct 1st, to that, then the expiration of unemployment benefits, then the possibly of the virus and lockdowns returning and it’s going to be an ugly winter of discontent.

      Add to that the virtual elections, with all manner of software hacking, by both sides, and the legitimacy of authority will be the only thing being taxed.

      Go long guillotines.

      • Bobber says:

        It really gets ugly when unemployment stays high but inflation kicks in. The Fed then has to increase interest rates to avoid a hyperinflation scenario. Stocks, bonds, and RE all plummet.

  8. SocalJim says:

    Everyone is making the same mistake … they are trying to use the 2008 recession as a playbook to this recession. They are two different animals. 2008 was a deflationary recession because the financial crisis evolved into a credit crunch since bank balance sheets were impaired. This time we have an inflationary recession because the supply of many things has falling faster than demand. This time, no credit crunch. Sure, there are layoffs. However, today existing home sales for April were reported at record price, up 7.5% YoY. At the same time sales dropped nearly 20%. We have rising prices on falling sales. Yesterday, Redfin reported bidding wars are occurring on 2/3rds of metro Boston housing. Food prices are headed up. Part shortages and COVID work standards will slash the supply of new cars as well as so many other goods. The list goes on and on. In the meantime, unemployment is rising. Stocks are rising for a few reasons, one of which they provide an inflation hedge. So, accept it for what it is … an inflationary recession … and enjoy the ride. If you play the deflationary recession playbook, you will lose.

    • Doug says:

      Socaljim, you can lose a lot of money in stocks while the economy is shrinking and consumer prices are rising.

      Historically, only after inflation is vanquished by the Fed raising interest rates and after stocks have already cratered do stocks catch up with the generally rising price level. Yes, stocks are an inflation hedge in the long run, I agree, as corporation revenues and earnings are in nominal dollars.

      I’m talking generally. What’s happening to our markets now is likely just a bear market rally.. but who knows?

      • Noelck says:

        The Fed cannot raise rates to fight inflation. Volcker had to raise rates to 20% in an attempt to curb inflation. I doubt we can even service our debts at 4%.

        The Fed likes to make it sound like they have tools to control inflation. The fact is there is no easy way to fight inflation and once it takes hold can last for years.

    • Just Some Random Guy says:

      Spot on SoCalJim.

      Retail used car supply is at 41 days. This number is lower than at any time in 2019. Very similar to housing. Demand may be down, but supply is down even more. Hence, prices increase. Econ 101 stuff.

      Anyone hoping for a 2008/9 type fire sale on cars or houses is going to be very disappointed.

      • Wolf Richter says:

        Just Some Random Guy,

        No, you don’t even SEE much of the used vehicle supply because it’s not on dealer lots. It’s still owned by rental car companies and leasing companies and is parked wherever there is room to park, waiting to go through the auction. This is pent-up supply.

        Similar dynamics are happening now in commercial and residential real estate. It’s often called the “shadow inventory.”

        • Just Some Random Guy says:


          Auctions have been up and running for several weeks. Inventory is moving through.

          Also, travel is ramping back up again. It’s going to take some time to get back to normal, but things are improving slowly. Compare recent TSA screening numbers to April numbers below. Already more than doubled. Hertz isn’t going to sell their cars now and then have to buy them back in 6 months. They’ll just park them and wait. Much like airlines are doing with planes.

          TSA Daily Screenings:

          5/20/2020 230,367
          5/19/2020 190,477
          5/18/2020 244,176
          5/17/2020 253,807
          5/16/2020 193,340

          4/22/2020 98,968
          4/21/2020 92,859
          4/20/2020 99,344
          4/19/2020 105,382
          4/18/2020 97,236

        • Wolf Richter says:

          Just Some Random Guy,

          The travel data you cite, the TSA daily screenings, is still down 91% from the same weekday a year ago. It has been in that -91% range since May 8. At this pace it’s going to take a long time to where it’s down “only” 80%:

      • El Katz says:

        Retail used car days supply is not a number I would bank on. Why? Auctions are closed. What limited sales were occurring served to reduce the day’s supply. Since there were few replacements coming in, sales could diminish dramatically and the day’s supply would still be low.

        The hidden inventory (those stuffed into auction lots and those parked at stadiums, airports, and anywhere else there’s a flat piece of land) isn’t showing in the day’s supply number because the retail day’s supply numbers reflect only inventory at dealerships and dealerships are conserving cash by not buying inventory because they don’t know what direction the values are going to go. Day’s supply can be manipulated…. it always has been and always will.

        Car biz 101.

        • Just Some Random Guy says:

          “Auctions are closed. ”

          Auctions WERE closed. They are open now for the most part.

    • Tim says:

      It’s not just that. The scale and speed of change blows away comparisons too.

      • RD Blakeslee says:

        There is has been a great deal published about life in the U.S between 1929 and 1932, or so. Look at it – there’s your comparison with 2020, so far.

        • Tim says:


          I do get that, same for other arts of the world. That said, from a simple google search, even, the unemployment rate climb was considerably slower from 1929 onwards. It took from 1929 to 1932 for the unemployment rate to rise to over 23% ( from 3.2% in 1929, I believe)

          It took between the onset of difficulties in 1929 to 1931 before the unemployment rate rose to 15.9%.

          The US unemployment rate has gone from, as reported above, around 3.5 % to 17.2% at least, in around 3 months. and, it looks like it isn’t done yet with more substantial climb possible in a few months, not years, timeframe.

          It’s that diffrerence in speed and scale that mekes it difficult, for me at least to compare the two.

          I do respect your point, however.

        • Stuart says:

          They used to call them “ Hoovervilles “. This winter they will call them “ Trumptowns “.

        • Tim says:

          If you can see my meaning beyond the dreadful typing.

    • Petunia says:

      You keep insisting the market in California is doing fine, but out here, we just don’t see it. All we see in a homeless population which has become a national embarrassment and a long stream of working/middle class people who can’t wait to get out. So who’s buying?

      I don’t trust Zillow or Redfin anymore because they have an incentive to drive up listing prices to shore up their own book. Which is exactly what I think they are doing.

      • VintageVNvet says:

        Agree with you about Zillow doing their best to drive apparent pricing up Petunia. Thinking they are trying to cya, eh.
        They have raised their estimated sale price on our tiny 1950 cottage by another $18K in just the last couple of weeks, after a nearby brand new house sold for the equivalent price per square foot.
        While it might be true that the dirt/land value went up a bit prior to this virus event due to new housing in the hood, it is certainly not going up since then, and is likely dropping fast, as I am seeing more and more for sale signs on the local streets, no new houses started since early February, and a pending sale down the street fail due to buyers not able to obtain financing under the new rules.

    • Ed says:

      They’re bidding in Boston, perhaps, because the professional class is still working, practically unaffected financially.

      The overall sales are down because new, younger, poorer buyers aren’t buying?

      The statistics you mention might be pointing to a very divided economy, where there are pockets of inflation, where professionals buy. And everywhere else, excepting food, prices are like oil prices. Down because demand has crashed.


      • SocalJim says:

        “The statistics you mention might be pointing to a very divided economy, where there are pockets of inflation, where professionals buy. And everywhere else, excepting food, prices are like oil prices. Down because demand has crashed.”

        I do think this is possible … very possible.

        • Andrei says:


          Deflation vas Inflation: I think all depends on whether the old credit will get destroyed. Jdog posted a number of very good comments on that a while ago. I tend to agree with him – there are limits to where they could create new credit – you just can’t push on the string forever.

        • Ed says:

          I’m on the good side of this divide, fortunately.

          But I’m worried. I think it’s bad for a country to create policies that tend toward what has been the norm in Latin America, a chasm between the poor and well-to-do.

          It’s not just the lack of justice.

          Sigh. I can’t help but think of Rome impoverishing their peasantry by farming out taxation and encouraging the private tax authorities — who were the most wealthy in the provinces — to be rapacious. Eventually, the people who were needed for the army in an emergency didn’t show up or couldn’t show up because they couldn’t outfit themselves with a sword or a horse.

          Even before that happens, the mobile talent moves on. Right now, the U.S. gets the best talent of the world. They come and they stay, enriching us all. That could change, although our great universities will slow the process down.

        • VintageVNvet says:

          Possible and even probable Jim, as was clearly the case in the last crash, when almost all RE took a significant hit, then some was right back to the high point in a couple of years, other areas still not back up to the highs of 06-08.
          And I too, blessed to be in ”relatively” safe financial position, am hoping we can work it all out to make the ”fruits of our labor” go more fairly to those who earn it, rather than the financial wise guys who prey on the working folks.

    • This is definitely like the 70s recession. Money moving into tangible assets. It took a decade to work out the political solution, which was deficit spending on unnecessary military hardware. MMT is a variation on a theme. Any whiff of rising interest rates, smells like naplam in the morning.

    • Wisdom Seeker says:

      There’s plenty of deflation. Bank stocks are performing badly, and spreads are stretched, which suggests that credit issues are in play too. The Fed has a bandaid on that wound at the moment but there’s no way you avoid credit issues with people unable and refusing to make the usual monthly payments.

      As for housing – change in median price often reflects sales mix rather than underlying same-unit price changes. Wake me up when a Case-Shiller type number shows actual price increases.

      If there were outright shortages of homes driving up prices, then months’ of supply wouldn’t be steady, but it is: 4.1 months. Good news is that supply and demand dropped in tandem, so supply isn’t crushing demand right now.

      • Jon says:

        Last time housing took 4 years to bottom up
        It is too early to say anything about the housing
        But with millions of people unemployed it is difficult to fathom how home prices won’t go down

        I am seeing softening prices in San Diego Diego although not much

        Sellers are still expecting the March prices but the whole world changed in last 2 months
        Itd take a year or so atleast for the price discovery to work out

        • Phoenix_Ikki says:

          Maybe people in general or just Murica tend to have really short memory and patience. It’s hard to believe we have only been in lockdown mode 2 months at most and some states even shorter than that and the perception is as if we’re been locked down for 2 years. With such short patience and attention span, that’s why I find it hard to believe when people keep saying the market is sooo forward thinking and looking at 2021, 2022..etc. With RE it will take even longer to play out and so many pros out there already calling bottom or uptrend in less than 2 months, there’s a lot to play out over the next 6 months to years..

        • Jon says:

          Mostly people with vested interests on both the sides are calling their shots.
          People who are realtors or have real estates are saying that there won’t be impact to home prices etc etc
          People who are waiting to buy are saying that real estate would go down

          But we all need to do an objective analysis which is difficult even for me.

          If the common joe are not spending money because of job loss, economic uncertainty etc then the so called professionals/white collar jobs are also not safe. they may a domino to fall later but fall they would.

          its’a all intertwined economy.

        • timbers says:


          Forward thinking = Wall Street looking forward to eternal QE and ZIRP Infinity because the Fed told us they will make the stocks go up not matter what.

        • Tim says:


          I wonder if the effects will show in January-March 2021 as furlough schemes have ended and families have held on to have a christmas where they are before they throw in the towel..

          Grim, but I wonder if that may be the way things unwind.

          Underpinning that is the observation that this current situation is moving fast and at such a scale that it may bottom out more quickly than in previous downturns.

        • Noelck says:

          with the number of delinquent mortgages rising 30% per month I would expect home prices to fall in the next 6 months.

          It will be interesting to see what happens to rents in six months. Will they go up?

          There is little doubt that commercial real estate is going to experience a giant disruption.

      • Tony22 says:

        “There’s no way you avoid credit issues with people unable and refusing to make the usual monthly payments.”

        Smart people are running credit card debt limits as high as they can to stock up on essentials, like food, spare parts, withdrawing cash, etc. The higher the debt on credit cards, the more willing banks will be to compromise when people refuse to pay, and the more likely the lobbying will be in D.C. to bail out humans, rather than financial corporations.
        Today a chump is defined as someone who spends down their limited cash to pay bills, and keeps their credit rating high and owes nothing to corporate America.
        They will be those starving next winter, with their credit cut off, but a higher credit score to proudly tell their hungry children about.

        • w.c.l. says:

          An idiot is someone who pays 18% on a credit card.

        • VintageVNvet says:

          Balony Tony,
          Call us chump if you wish, but those of us who have seen this kind of thing over and over and over know that sooner or later, the rulers will have your assets or something in the way of the first three letters of that word… No debt, no overhang, no hangover!!!
          And besides that, some of us who have tried doing exactly what you suggest have ended up sorry as hell as the ”bad money” caught up and kicked our assets to the curb.
          There used to be a common saying something like, ”ya can run, but ya can’t hide” and I will only add ya can’t hide your ”assets” either,,,

        • Tim says:


          Psychologically, I suspect that such debt will now be hanging lower over their heads than that.

        • Wisdom Seeker says:

          Tony – wrong. Smart people had 6 month’s expenses already parked in cash (or one of Wolf’s famous CDs) ready for exactly this sort of situation. They added savings in January and February when the writing was on the wall that a pandemic risk was real. They have no credit card debt because they never spend money they don’t already have. Their lifestyle is very modest because they aren’t trying to keep up with anyone, so their mortgage is less than 25% of one income. Yeah, they had two jobs before, and one got laid off right now, but they’re still ok. That is what all the “smart” personal finance books have detailed as prudent living for the past 3 decades.

          And those people are working to get that second income back, honestly, looking at where the future spending will be. They’re not trying to spin their financial statements to siphon unearned bennies from banks and taxpayers. And they’re not waiting forlornly for last year’s vanished jobs to return.

        • NotMSM says:

          What you wrote makes sense. Ugh. I’m one of the foolish savers.

    • Seneca's cliff says:

      We will have deflation ( and not inflation) because the value of assets is plunging so quickly that the small changes in the price of goods due to supply constraint is irrelevant. So when a shopping mall that had a Nordstroms, a Macys and Pennys and was valued at $200 million loses all those anchors plus most of its brick and mortar tenants and drops to a bare land value of $10 million than that is deflation in action. Or a condo on Maui once had a value of $2 million but now can’t be rented on Air BnB and no one can go there without being in a 14 day quarantine, and if they get through the quarantine they can’t sit on the beach ( or they will be roughed up by the locals) drops to a value of $500,000 than that is deflation in action.

      • Petunia says:

        I was watching a utube video about real estate prices in New Orleans, a city I sometimes visit. Three real estate brokers were trying to convince a mortgage guy, from up north, that the city is a super hot market.

        According to NOLA.com 30% of the water customers are not paying and 40% of the electricity customers are not paying as well. Not the stats of a super hot real estate market.

        • Joe says:

          Always a hot market in Canada…
          The Realtors are the one that make their own stats and report it to the media. They say prices have increased.
          But, the mortgage brokers are fearful of a possible 20% house decline in prices.

      • Noelck says:

        All of you would be right on deflation if we had a fixed money supply. When $5 trillion gets magically created you will get inflation. It may not be right away but will eventually trickle down.

        Real estate properties will initially fall but when they hit a distressed level there will be large firms that purchase these and before we know it we will have another housing bubble.

    • Ryan says:

      Give it up. Boston is literally a Ghost Town right now. Restaurants shutting left and right. Tons of students not returning. Just walk outside. This isn’t rocket science.

      Real Estate going forward is a scary thought IMO.

      • Tim says:

        Cambridge University hsa just announced that they will deliver all, ALL, lectures by videolink next academic year.

        So how many will justifiably argue that they shouldn’t be required to rent student accomodation?

        Now Cambridge and Oxford are not poor by any means, but many university and the areas around them will not be able to wear less students on campus spending, spending,spending.

        How many second rank universities will be able to manage without the icome from foreign students?

    • Wolf Richter says:


      Existing home sales COLLAPSED, as reported today. As you know, because you’re a smart guy, when volume collapses at the lower third, the median price shifts up because the number of lower priced units in the mix plunged.

      Median price is heavily skewed by changes in the mix. I should devote an entire article to this median-price-mix phenomenon because this is becoming an issue.

      That happened during the last housing bust too — twice. At first the median price was still rising due to the mix change as the bottom third was falling out of the mix. Two or three years later, the forced selling at the bottom third increased volume at the bottom third, and the this change in the mix pushed down the median price more than actual home prices.

      This is one of the differences between median price housing data and the Case Shiller data which uses “sales pairs” instead of the median prices for that very reason. However, the CS lags so far behind that it is useless currently.

      • Jon says:

        Honestly , median price does not make sense in skewed market. The only thing which matters is case shiller but it lags quite a lot

    • Jdog says:

      2008 was a speed bump, 2020 is a concrete abutment.
      There is no such thing as a inflationary recession, the statement is an oxymoron.
      You are attempting to judge the outcome of what will be a minimum 2 year recessionary period by a 2 month time period which has been artificially spiked by the largest infusion of cash in history.
      Even given the gigantic cash infusion, the numbers of “hardship cases” has spiked and the real effect has not even begun to be seen.
      A conservative estimate would be a least a 40% retracement in both real estate and the stock market. Commercial real estate will be hit even worse. We are never returning to where we were prior to the virus, because where we were was not sustainable, and that is the new reality..

      • Yertrippin says:


      • Wisdom Seeker says:

        Jdog, you must not have lived through the 1970s and early 80s. There absolutely is such a thing as an inflationary recession.

        The current situation isn’t the 1970s though.

    • Bobber says:

      Why buy a house when landlords are opening their wallets to bring in renters and avoid vacancies? My landlord sent his lease proposal out early this year, eager to point out there would be zero rent increase. I have a feeling I could have negotiated a 3% reduction, if I wanted. I think he breathed a sigh of relief when I signed it.

  9. Cas127 says:


    Thank you for the full 50, each state has a unique and interesting story to tell.

    MI for example…with that level of unemployment, and assuming that new car prices are not re-posted lower (due to labor costs falling greatly due to availability), then you really have to wonder if America will survive its economic distortions, having fatally tried to evade the self-correcting mechanisms of a free market.

    I know that a lot of US production is outside of MI and its rigid labor supply rules…but that said, if cars “can’t” be made more cheaply when nearly 25% are unemployed and inexpensive labor should be in superabundance…then the US has fatally placed its faith in doomed, fictive “gvt stability” rather than the dynamic adjustments that lead to true productive progress.

    It is only the (dying) faith in an ever more debauched dollar that keeps this whole deluded circus stumbling on towards its next debacle.

    • Thomas Roberts says:

      The issue with the Michigan car makers is that they have continually for almost 50 years now. Sacrifice the smaller “physically smaller cars” less profitable end of the car market, in favor of the larger more expensive car market. This lasts until there is a crisis and then they demand a bailout. In the 70’s they wanted their competition banned. In ’08 they wanted money. They will be asking for more money soon. Every time this happens, they are in a worse position and make up a smaller percent of car sales in America and abroad.

      This is on top of other things they have done like requiring all pickup trucks to be made in America. Ban/sabotage domestic competition Tucker and Telsa. Conspire to eliminate pubic transportation. Make cars designed to fail and expensive to fix.

      If their marketshare drops any further, the next time they ask for a bailout, everybody might just laugh.

      It’s time to start using money to create new winners instead of propping up losers.

      • gb says:


        Every single ship carrying cars from South Korea to the United States passes by Yokohama port in Japan. None of the South Korean cars are disembarked and sold in Japan. Why not? Because the Japanese people collectively decide that they will support their own manufacturers. Their government in turn, passes laws which theoretically allow tariff-free auto imports, while simultaneously discriminating against imports through usurious registration and inspection fees.

        So if the US requires a tariff on trucks, does that hurt you? Your neighbor has a job – how does that hurt you? Personally, I am happy to see some auto manufacturing remaining in the US. It gives people jobs, self worth and dignity.

        As far as Tesla goes, it is a remarkable company. I am happy to see them push the state of the art. I have not seen any effort to sabotage them on the part of NA manufacturers. Compete, sure. Sabotage, really??? The most serious threat to Tesla might come from VW, who have a e-vehicle with similar range and lower price in Europe. Yes, that VW, owner of Audi, who make all of their cars destined for sale in the US in Mexico. Is that what you want? Ford destroyed and VW elevated?

        It is a competitive world. Other countries help their industries. Part of the reason Tesla has a plant in Shanghai is to take advantage of Chinese government support for electric vehicles in China. I have seen speculation that Tesla might eventually shut down manufacturing in Fremont CA in favor of cheap Shanghai exports. Is that what you want?

        I currently drive three vehicles from GM. All have > 150k miles. Designed to fail? Yeesh. If this is what a loser company produces, then I’ll buy more from the same company. And in doing so, I will support my neighbor. Because that will help keep America strong.

        • Thomas Roberts says:


          As far as sabotage goes, it’s hard to prove most claims against GM and Ford. One easy to prove example, however, is that GM try’s to block Telsa sales by using dealership laws against them and pushes for states like Indiana to create laws blocking direct online sales of cars to consumers, requiring, automakers instead to have dealerships in every single state to be able to sell cars to consumers. This is undeniable. There are a lot of things like this the GM and Ford do, that prevent new American car makers from coming into existence, growing, or surviving. This is on top of more conventional anti-competition things large American companies do like pushing for much higher and expensive standards for new factories that GM and Ford will always sneak around or be grandfathered into. It’s an open secret that most of those ridiculous regulations companies have to adhere to, you always hear about are written by large companies trying to prevent new competition. This is a fact.

          There is nothing wrong with wanting cars to be made in America. The problem is allowing the big 2 “Chrysler is no longer American” to prevent new competition. My current car is a GM and my next one might be, but, a car surviving to 150,000 miles is not hard. A car is a bunch of pre-assembled components put together, where some parts will wear out and need to be replaced. What’s not acceptable is making those parts needlessly hard to replace or combining them into bigger parts like the entire exhaust system being one part. And some parts are in fact designed to wear out on purpose, so you have to get overpriced repairs.

          GM and Ford have a global marketshare that is plunging. And my above points still stand. GM is undoubtably planning to create a money losing electric car to undercut Telsa and put them out of business. Will they succeed? Who knows, if they do, there will again be only 2 carmakers in America and i’m sure if they can pay off enough of congress there won’t be another. It’s time to fund new competition rather than shackling American industry to GM and Ford.

    • Tim says:

      Renault set up the budget Dacia brand several years ago.

      They are a common sight in France now. New, simple small 4×4 (by US standards) for $23,000.

      2 wheel driver version with air con, less than $16000. Not quick or sophisticated, admittedly.

      Don’t, though, break down as often several other makes that will remain nameless.

      You can see the appeal.

  10. Tim says:

    Just out of interest, are the bottom 8 ( South dakota, wyoming etc) slow in processing claims or are they states with higher proportion of agricultural jobs that have not yet suffered big cuts?

    • Just Some Random Guy says:

      Those states either didn’t close or were very quick to re-open. Weird how states that allow people to work, have low unemployment, huh?

      • Wolf Richter says:

        Just Some Random Guy,

        Yeah, a state could have just gone on as if nothing had happened and sacrifice tens of thousands of people, or in a big state, hundreds of thousands of people, so that your stocks could continue to go up. As you said in the past, you live in a village far from anywhere and work at home. So you feel protected and you get to rant on about how other people’s lives don’t matter.

        • Just Some Random Guy says:

          When did I say I live in a village? I live in a city of ~50K, in a metro area of ~500K.

          I never said other people’s lives don’t matter either. I said, do what you feel is best for yourself. If you want to stay locked up? Stay locked up. Nobody is forcing anyone to go outside. But look around nobody is really staying home anymore. Big city or village, the masses have said enough and are out and about.

        • Wolf Richter says:

          The lockdowns in the US didn’t lock people in. In California, we were encouraged to go outside to exercise, for example, and lots of people do. I’ve never seen so many people exercising.

          Everyone knows the economy needs to be opened up. But if people are stupid about it, a lot more people are going to die. It’s just as simple as that. We need to be smart about this.

        • Phoenix_Ikki says:

          “Yeah, a state could have just gone on as if nothing had happened and sacrifice tens of thousands of people, or in a big state, hundreds of thousands of people, so that your stocks could continue to go up.”

          I thought this is the MO on how the elites and majority of the people in this government operates. Let’s call spade a spade, majority in charge are more than willing to sacrifice the “others” for their wealth and power without as much a remorse as stepping on an ant and give about just as much care about it too.

          Couple that with a pretty big portion of our population that protest for things that ultimately victimize them in the name of freedom or liberty. What’s silly is that these people think they are protecting liberty or freedom by protesting stay at home or wearing masks in public, meanwhile completely ignorant or silent on things that are truly eroding our freedom and liberty like NSA spying, Freedom acts..etc.

        • TXRancher says:

          “Yeah, a state could have just gone on as if nothing had happened and sacrifice tens of thousands of people, or in a big state, hundreds of thousands of people”

          You mean like in 1968-1969 Hong Kong flu? The country did not close down and people voluntarily practiced social distancing and cleaning. Even had a little music festival during that outbreak called Woodstock.

          And there is no evidence that the stay-at-home social distancing had any impact on the spread of the Wuhan virus. None.

        • MCH says:

          You could get some anecdotal evidence of what would’ve happened if nothing was done. Look at NYC, it was totally screwed up from being kept open just long enough for waves of infected to go through its gateway airports, and whacked however many percent in NY with C19. Although I think there needs to be a more granular look at the data to see where the infection happened, and whom it really affected. And the impacts of government orders for good or ill in the city and state level.

          This is likely stuff that will not see the light of day until we’re all long dead. Because this is the boring kind of work that real scientists would do to try to figure out what happened, and how it happened.

          I think that the big problem is that not every place is the same, and the lockdown in CA is probably effective in places like SF, and most of so.cal, but go out to the central valley area, I’m not sure it would be the same.

          But without the ability to know the infectiousness of C19 back then, and how dangerous it was, it was reasonable for people to assume the worst. The problem is that if you figured out how infectious it was, then you could end up with a lot of dead people on your hands.

    • Wisdom Seeker says:

      Tim, another possibility is that they have lower population density and thus a lot of built-in social distancing … so they didn’t need to shut much down in the first place. Probably more political resistance to shutdowns in some places too.

  11. Wisdom Seeker says:

    There’s other chat on the internet about PUA being a fat-finger, 1 million extra. Massachusetts I think. Anyway, don’t trust that data, not as bad as it looks.

    Also the seasonal adjustment model is being applied wrongly for continuing claims, causing claims inflation by maybe 9%.

    Still bad, but not getting worse.

    • Wolf Richter says:

      Note at the 27.3 million with PUA is NOT seasonally adjusted.

      • Wisdom Seeker says:

        Here are the documented errors I’ve seen:

        1) Initial PUA claims for Massachusetts should have been 115,952, but was misreported at 1,184,792. And there’s no way that Mass. suddenly processed 1 million claims and became half the nation’s weekly PUA. So this week’s PUA initial claims should not have been 2.23 million, but 1.06 million with correct Massachusetts data. And that’s pretty much the same level as the past 2 weeks – not a huge spike. (It’s also not clear to me whether or not these are all cumulative, or if some are resubmissions because of various issues. Regular initial claims are not 100% cumulative.)

        2) The non-seasonally-adjusted data for continuing regular UE claims is 22.9M. A multiplicative Seasonal adjustment (1.09x) put the data at 25.1M. There’s no historical basis for such an adjustment. During unique times the NSA data are what matter. And at 22.9M, the number of continuing claims is basically unchanged from last week.

        P.S. The rate at which data-entry errors are occurring is inconsistent with a well-run process (one that includes any level of cross-checking). Most people who cared about the result could type 50 or 100 numbers correctly each week. So there’s suspicion that the fat fingers might be deliberate. Anyway, all the UE claims data are therefore suspect for a couple of weeks until the corrections get made.

        • Wisdom Seeker says:

          So if you take the 27.26M “total number of people claiming benefits in all programs” (including PUA) and subtract the 1.07M error from Massachusetts, you get 26.19M, which is within 1 million of the number from last week. That’s within the likely noise level for the initial-release data series.

      • MCH says:

        Do you think the unemployment number is adjusted for the Nigerian prince? I was read this note a few days ago on Kerbsonsecurity regarding how there is a lot of fake filings going around to scam people out of money. I figure the magnitude of the problem is probably not that big, but it’s interesting to see that the scum of humanity has decided not to take a break during these times.

  12. A says:

    In America you either have enough political connections to get free FED money or you’re roadkill.

    Soon enough it’ll be just 400 billionaire families and 300 million debt-serfs.

  13. Joe says:

    Last I checked it was 12 govwernment supervisors to 1 worker…
    I guess they’ll increase a lot more now.
    You don’t here of government workers being laid off.
    Oh silly me, they are processing the forms and enforcing the new social distancing laws.

    • Mike G says:

      400 city employees laid off in my city of 85,000.

    • Matthew says:

      Lots of cities have furloughed or laid off staff in the Denver area. Generally ranging from 200-800 employees for each municipality.

      Don’t forget they also provide utility service in most areas. I hope you’re not advising we lay them off too? Not sure about you but I appreciate the water, sanitary and storm service in my area. I’ll never get the hate towards local government.

      • Cas127 says:

        “I hope you’re not advising we lay them off too?”

        It all depends if they were hired to perform a necessary function or simply as a bought vote.

        For public sector jobs, vast useless overstaffing is a continual threat…since hirelings can vote in support of their vast uselessness…paid for by general taxation.

        Unlike the private sector – where waste cannot be infinitely subsidized because it does not control the public fisc (well, until Fed Unlimited…), government workers make up 20 percent of the population (40% of the way to a majority) and they know *exactly* how their bread gets buttered.

        That is why public sector unions are such a potent political force.

        The general public makes the habitual mistake of assigning importance to public functions based of their claimed objectives/budget inputs rather than actual outputs.

        There are plenty of CA electrical utility managers who made ruinous decisions over the last few yrs…are they indispensable because we need electricity?

        Or how about the CDC worthies behind the test fiasco…do they get lifetime employment because “Disease Control” is on the doors…rather than on the streets?

        Labels and titles are just that and claimed expertise is not self-proving. The US has seen too much ruin to keep falling for this evergreen scam.

  14. Joe in LA says:

    If this experience doesn’t generate class consciousness among working Americans, I don’t know what will. And if doesn’t, these folks are going to become a sort of permanent peasantry.

    • Xabier says:

      Well, I’ve always thought that the hooded sweatshirt, baseball cap and baggy pants was in fact a kind of peasant costume for the 21st century.

      Terribly clever getting the masses to adopt it.

      Oh, and now sleeve tattoos, that seals the deal.

      • neplusultra says:

        Yikes. This man definitely eats dinner at 4:30. What’s it like being old as dirt?

      • neo-realist says:

        It seems to me now that skinny pants are increasingly becoming the peasant pants costume rather than the baggy ones. The baggy pants are more 1990’s, 2000’s. Clever of Madison Ave getting middle america to adopt what was underground fashion back in the 70’s and 80’s, at least in the big cities.

    • Phoenix_Ikki says:

      Sorry the mass population has been conditioned so long to not resist for the greater goods (but very good at bitching about things that don’t matter in a systemic way) or to be completely willfully ignorant to what’s causing their miserable. The one that care enough to be angry just end up redirecting all the energy to the boogeyman. I don’t have much faith in counting on our population to fight back. Other countries, perhaps there’s hope..in Murica, we’re too busy watching Tiger King than to actually read up on what Neoliberalism has done to us in the last 40 years.

      • Cas127 says:

        Or maybe we have to weigh sporadic plutocracy against a political class that promises the medical Millennium but can’t even deliver functional insurance websites with five year lead times and 2 year post deadline work.

        It is quite possible to hold both factions in contempt and distrust.

    • No Expert says:

      They buried it with the last guy who used it. The state has the fire power and willingness to murder as many as it takes. The idea that at the end of the rope is a pitchfork to hold onto when all else fails im afraid is misplaced.

      • cas127 says:

        Even in the context of violence, quantity has a quality all of its own and most generals want to be on the side with the most personnel.

        They may not universally prevail, but that is the way to bet.

        That is why narrow political classes prefer propaganda and deception to open force.

      • No Expert says:

        Fair point. Chris Hedges points out the only successful revolutions are peaceful ones b/c you can’t outgun the state, if the police side with the working class you gottem licked.

  15. WES says:

    Government interference in the labor market ensures the unemployment numbers will only get worst.

    Politically this is by design. It is all about regaining power.

    We all know what kind of chart a dead cat bounce makes.

    But what kind of chart does tossing a live cat by the tail, up against the ceiling make?

    We know cats always land on their feet.

    Does a live cat going upwards, land on it’s feet when it hits the ceiling?

    Does a live cat bounce when it hits the ceiling?

    Inquiring minds want to know!

  16. The solution here is to keep most of those cars off the market. If they extend and pretend the decay value will be less impactful when they sell into the market. USG could buy these cars and call them a “deferred asset.” The real problem arises when after the crisis people are driving less.

    • Jdog says:

      Sure, the government could do many things so long as you don’t mind being in a 99% tax bracket…..

  17. S says:

    Yeah sure, high unemployment. Got it. I just can’t understand why the DOW is down 80 points on the news. Why aren’t stocks soaring? Oh, it’s Memorial Day coming up, so the ramp up in the market will be into the close today or early tomorrow morning.

  18. mtnwoman says:

    “I’m a big champion of competitive markets. These aren’t market economics. This isn’t capitalism. This is just an oligarchy feeding off the rest of the society, and it’s as bloodless, uncaring and dangerous as the coronavirus. It’s killing our country” –@DavidCayJ

  19. Brian White says:

    I find it amusing that the others articles I saw about this seemed to emphasize how the unemployment claims number is coming down. They somehow overlook the fact that 9 weeks later it’s still greater than 3x the worst ever on record before the pandemic.

    I really didn’t think that hope could stretch this far.

    • Tim says:

      Exactly – Numbers reported per-week are coming down, sure, but the volume under the curve is still shocking.

  20. BuySome says:

    Lots of would be, should be, could be in the early phases of studying any event. Could be Fed flooding aft compartments to hold the bow up and slow the leaks over forward holds. Could be large parts of 2nd and 3rd class are in the water, while some steerage are still behind lock gates. Lights on, batteries charged, but engines sputtering to run pumps. Price of life vests going up among remaining passengers. Some of the wealthy throwing all their goods into the lifeboats to try to obtain a space. Those already in the boats are exchanging places in the hopes of picking up a few of the baubles falling to the floor. Lots of free hands capable of rowing if their were any oars, but this ain’t no Greek history. Boilermakers, stokers, and engineers all involve training and experience. The officers know they must stay ’til the end when the captain says “Abandon ship, boys!”. Just a could be..grab a deck chair or retire to the saloon wearing your finest. Show’s on.

  21. Augusto says:

    I am in Canada, and we are starting to “open up”. Unfortunately, once stores and business’s open up, they see how little real business they actually have. Layoffs are already taking place, because the fantasy of V-shape while at home, meets the reality of no customers and no money to pay for anything once you get to what was once called a workplace. Just got off the phone with a friend of mine who got her notice, and now has to start looking around (husband working part time, two young kids and she is/was the main bread winner). Its not a V-shaped recovery, its a twisted L, for Big Lie. But, hey, maybe the Dow will hit 40,000 by year end…..

    • Ed says:

      It’s not just the economic disruption of people who don’t feel secure or have zero income.

      People will remember a friend or friend of a friend who died and be reluctant to fly, go to the mall, go out to dinner, etc. etc. We have relatives of close friends but no closer than that.

      I expect my family will go to the beach before the year is out (I could be wrong!) but I doubt we’ll be dining in much in the next six months. We are certainly not flying or booking a cruise.

      People have memories and that alone will slow the recovery.

      • Ed says:

        (Honestly, I’m almost certain we’ll get to the beach. The issue is deciding the hotel or condo is not an issue for the kiddos. We’ve already been in a local creek and a river a little bit out of town. Outside, we’ll do, but we don’t spend a lot of money doing that.)

    • Joe says:

      And the constant threat of reclosing everything again and again.
      Is it wonder businesses are permentally bailing and closing?
      Not to mention additional laws and restrictions on top of the massive current laws and regulations.
      Said to my wife yesterday that the happiest I have been was way back in the early 1980s when we had freedom before governments decided for us.
      It is about the same time we lost common sense.

      • Raging Texan says:

        @Joe early 80’s are you kidding? Early 80’s you had a huge federal govt, the federal reserve existed, social security, medicare and numerous welfare programs were very strong programs. Farmers and small business were getting crushed by OSHA. Minimum wages were decreed. The Fedgov flagrantly violated the interstate commerce clause, the FDA and DEA were regulating what people put in their bodies (without any constitutional amendment to allow it), Reagan the fake fighter conservative and massive deficit spender who presided over it all was about to tax self employed (the smallest businesses) with payroll taxes and much more.

        You call that common sense?

        • Joe says:

          That was when Canada lagged behind the US by about 10 years.
          Still could work and support a family quite comfortably.
          Nobody cared if you walked across a neighbor’s lawn.
          Free fruit and blue berries and fish.

        • VintageVNvet says:

          IMO RT, the last time we had more common sense than not was the 1950s era when even kids could work selling or delivering newspapers, mowing lawns, etc., with no ”busy bodies” rushing to defend them from themselves.
          I made more ‘real’ money, ( as adjusted even by the BLS inflation calculator which we all know is BS,) per hour as a contractor/gig worker then than any time since, with the short term exception of the emergency and ”shut down” work I did in the eighties and nineties.
          Glad to see at least one other person confirm the ray gun bit… what a charlatan, from being a rat fink, to finalizing and formalizing the ”trickle down” screwing of the working people…
          Just before seeing this, I was saying, ”the only thing ray gun ever said worth repeating was, ‘the scariest words in the American language are, ‘I’m from the guv mint and I’m here to help you.)))

        • Raging Texan says:


          A lot of the same pieces of the FED-socialism model were already in place by the 1950’s, but they were in earlier stages so they took a smaller bite out of a family’s income.

          Another thing that made it easier for USA families in the 1950’s was that the rest of world’s factories and economies had been completely obliterated in WW2, and Russia & China were walled off- competition of globalism didn’t really exist.

    • Mark says:

      I run a big box store in Toronto and beg to differ.
      We re-opened under stage 1 about 2 weeks ago and our sales are just staggering. We are up daily and weekly percentage amounts I wouldn’t have thought possible… and that, with our customer count moderated by regulation. This is a Godsend after being shut down for 2 months and e-com only.

  22. John Brown says:

    Our company whacked 1/3 of our contractors 3 weeks ago. We have plans to whack another 3rd in 6 months, followed by the rest 12 months later.

    Another friend keeps sending me his resume but currently has a job. I am guessing because they already know there entire satellite office is being closed but he won’t say specifically.

    What is going on behind closed doors in corporate America is completely disconnected from what the market has priced in. Covid cure or not this is in motion now and nothing is going to stop it. Brace yourself.

    Many legs up based on printed and dispersed $ has to eventually be reflected in the market levels. How it has not already baffles me, but it will at some point.

  23. Michael Engel says:

    1) The unemployment rate is down because more small businesses got
    ppp loans. Their workers are officially employed.
    2) After 90 days the ppp loans will be deleted from bank assets.
    3) After 90 days the unemployment rate will rise when millions of those workers will no longer get be artificially employed.
    4) When people on the food lines scream “America is hungry”, both parties will bribe voters with trillions to the fill hungry tummies.
    5) This chimera will last until Nov.

  24. DR DOOM says:

    I cannot reconcile the fact that 50million+ of our citizens are without jobs and the stock market has discounted them to the degree it has. Something happening here. And what it is ain’t exactly clear.Ring a bell?

    • BuySome says:

      Good beat and you can dance to it. I’ll give a 95. Where’s Dick Clark when you need someone to run the show? Oh, dead…shit!

  25. Frank says:

    In Zimbabe during the worst of the inflation, (10,000 %), and the consequent collapse of society the stock market soared, after all when your cant save, you cant spend fast enough, and capital controls mean you can’t get your money out and it is turning into toilet paper in your hands the only place left open was stocks.

    • Cas127 says:

      “and capital controls mean you can’t get your money out”

      This part is key.

      The US doesn’t have capital controls (yet…just like we didn’t used to have QE money printing or the Fed authorized to backstop private companies) but we do have the somewhat misbegotten belief that the US is the “cleanest dirty shirt”…and that hugely props up the USD.

      But you look at accumulated debt load and real asset base growth, there are multiple better bets around than the US.

      Once that becomes a more general consensus, the US is going to self-liquidate.

      • Raging Texan says:


        correction, we have pre-capital controls. despite the idiotic blathering that Trump is pro-freedom, conservative (whatever the hell that means), pro-business, IRS continues to make it difficult for USA citizens to have foreign bank accounts.

      • VintageVNvet says:

        Seems to me that there are lots of controls of capital in USA Cas.
        Bank won’t hand over large cash out of account without notice, and anything over $5K requires a form filled out so guv mint can track, etc.
        Been a while, but there used to be a long wait even to cash smaller checks unless the banker knew you personally and was willing to sign off on the check, etc.
        Seem to remember similar re taking cash through international travel??
        Has all this changed in the last year or so?

        • Cas127 says:

          Capital controls are usually defined as legal restrictions placed on being able to exchange one nation’s currency (the supply of which the G can change at its pleasure, gutting the store of value function) for another nation’s currency or specific real assets (like gold).

          It is the most totalitarian of financial controls, usually the province of nations in decline (UK, Italy, etc. Post WW2, and habitually misgoverned banana republics – which use money printing to prop themselves up and capital controls to keep economic actors from escaping the G’s control).

          Once a nation has ruined the reputation of its currency, it cannot rely on burnt citizens voluntarily retaining their wealth in-country.

      • Wisdom Seeker says:

        Cas, I call BS. There’s not a single country of any size that could absorb the consequences if the US were to “self-liquidate”.

        The fact that you didn’t name one is also quite telling.

        The US isn’t just the cleanest dirty shirt, it’s the only half-clean shirt that would fit a grown-up economy … as opposed to a small island economy.

        • Noelck says:

          As long as the US Dollar remains the world reserve currency we will continue to have a competitive advantage. The path we are currently going down could end up jeopardizing this.

          One of the scarier economies could be Russia. They have virtually no debt and a plethora of natural resources.

        • Cas127 says:


          There is no physical law that keeps the USD in a position of primacy once it is sufficiently abused (printed in the service of habitually poor political decisions) nor is there a physical law that requires 50 increasingly dissimilar states to remain United under a single tattered currency.

          There are multiple roads to national self-liquidation.

          DC seems congenitally committed to continually exploring the mine fields until it discovers at least one of them.

        • DeerInHeadlights says:

          What consequences are there that other countries aren’t already preparing for? China just debuted a digital currency with the explicit aim of reaching a state where they can do nation-to-nation currency transfers (kinda like the peer-to-peer crypto model) precisely to bypass the global banking system (SWIFT) and U.S. sanctions that depend on this system. Nations are also stockpiling gold with Russia and China in the top 10.

          But the world can’t trust China or Russia? Who says the world can trust the U.S.? Our foreign adventures in the last 30 years have been disastrous with calamitous consequences for many nations, especially those in the middle east. We have wielded the ‘sanctions’ card so recklessly, so frequently and with such dishonesty that the abuse of power is clear to everyone, especially to allies.

          The U.S. military is there to protect the US dollar and the US dollar props up the military and fuels its adventures around the globe. The two are joined at the hip. Can the U.S. get its butt kicked militarily? Unlikely but definitely not impossible. We may have swords but the other side isn’t simply playing with rocks and sticks either.

          Trust in the U.S. is at an all-time low. I can easily see the ‘belt and road’ countries signing up for China’s digital currency and bypassing the dollar completely in their little trade bloc. The same for countries in the Russian sphere of influence, think many former nations under the USSR, South America, Cuba etc. Who would need dollar reserves when a good chunk of your trade with other nations is in a digital currency that’s not the US dollar?

          Yes we haven’t reached critical mass yet but the transformation could occur much faster than many think. When it happens and reaches that point, it can truly snowball and catch you off-guard. The 800 or so U.S. military bases will turn into museums because they won’t be able to operate with a currency that will have lost tremendous value.

          It’s ok to be patriotic but get off your high horse of American exceptionalism and smell the coffee.

        • Tim says:

          Hey WisdomSeeker

          Leave off small islands!!

          Small island economies are cool.

          Just wear a dark blue shirt, that’s all ( sound if quiet, shifty, whistling)

        • VintageVNvet says:

          Gotta agree with the deer on this one, cas too, mostly.
          Been watching the continuing degradation of USD since becoming aware of at least some aspects of that process in mid 1950 era, especially jumps around crashes, etc…
          And the worst part is that the various idiocies seem to be increasing despite the increased analyses coming from all directions clearly indicating most if not all of the basic causes.
          THE question, formerly known as , “The 64 dollar Q,” now more like $64 Trillion Q, What to do about it ???
          At age 75, one of my choices would be to get rid of all the puppet politicians, especially all the old folks even close to my age who belong in the old folks home, or home with their grandchildren, etc.

    • Wolf Richter says:

      The stock market was denominated in Zim dollars, which were becoming worthless. So just to stay flat in real terms, stocks would have had to skyrocket by thousands of percent every day.

  26. MCH says:

    It’s crazy how screwed up our priorities are these days. I look at the major news sites, that number isn’t mentioned anywhere, front and center as always, politics. We hate Trump because XYZ… we love Trump because ABC (fox only). And then stories about some washed up actress going to jail cause she bribed the way for her kid to go to college, some BS about reopening… more political crap

    38M plus unemployed… stick it half way down and bury it in the middle of other sensationalist junk, and nobody notices. There was this wonderful WP comment about Democracy dying in the darkness, apparently, facts and objective truths gets killed due to neglect.

    • Cas127 says:

      Just because that is the garbage the mass media pumps out doesn’t mean that is what the masses actually consume en masse.

      Compare MSM mindshare/ratings pre and post internet. The MSM is a pale shadow of its skull screwing former oligopolistic self.

      All the irrelevant shiny object horsesh*t in the world hasn’t saved newspapers and people aren’t cutting the cord because they can’t live without CNN, et al.

    • Tim says:

      I remember a lecture once where an interesting point was made:

      ‘When the crowd are staring at something, look the opposite way and you may be surprised what they are missing’

  27. Tom Stone says:

    The virus will not go away, it’s going to be part of the Human condition just as the common cold is.
    Laurie Garrett’s BEST case case scenario is that we will have both successful treatments and a widely available vaccine in 3 years.
    That’s the best case.
    In the meantime we have what’s technically known as a “Shitload” of newly unemployed Americans who are going to hit the wall financially by early October.
    A significant percentage of them will become homeless and millions have already lost their health insurance.
    October is the beginning of ‘flu season and cold weather…Homeless, no health insurance, hungry, scared and in the middle of a pandemic.
    In an election year.

    • sierra7 says:

      Mr. Stone “nailed it”……..

    • Tony22 says:

      If ENOUGH people refuse to pay their rent, and other bills, there will not be additional homeless as the sheriffs will not evict large numbers of people, which would be politically embarrassing and lead to insurrection. If people are meek and spend down all their cash, then they will be picked off one by one through the eviction process.

  28. Rrr says:

    Let’s be clear about something right now. Office buildings are coronavirus infernos. They have no windows and air circulates throughout the building. Add one asymptomatic worker shedding the virus, working 9-5 for five days. All the masks and distancing in the world will not stop the virus from spreading to everyone in the building.

    Do our alt-right idiots not realize that everyone who worked in an office building realizes this? Get this straight: there is no herd immunity, there will never be a vaccine, the virus doesn’t weaken in warm weather, and no office worker will ever work in an office building again.

    This dooms the American economy. The permanent situation is an economy operating, at most, at 25% of what it was a year ago.

    Live with it.

    • Jos Oskam says:

      So right. And not just the American- but any economy where large numbers of people gather indoors to get work done.

      Like here in France, where people are by now supposed to go back to work, but lots of beaches remain closed.

      Go figure.

  29. Bobby Dents says:

    Rough day for stocks. The surge in puts was the tell. As a poster said above, nothing more than retail driven sentiment ala 1930. People have forgotten that one.

  30. Jojodogfacedboy says:

    I plan to have a blast…
    Just ordered up $100,000 In fake but real looking cash to play poker with the boys.
    Figured it be great fun to put down some big bets with it.
    No doubt in 10 years, it would be worth more than our inflating currencies.

  31. Cobalt Programmer says:

    Recession with a D……

    .Gov, Politicians, MSM and even the alternative sites will avoid the term D…… May be they use words like protracted, unanticipated, great-greater, longer, severe will not the D……..
    Now, we have a few options.

    1. Print more money with low, zero and negative interest rates.
    2. Green new deal or is it, New Green Deal
    3.Universal Basic Income
    4. Cuts to public spending, SS, Medicare and education/research
    5. Blame game based on race, poor people, religion, immigrants and other political parties.
    6. Huge cries against capitalism and free market economy (back door agreements actually)

  32. MonkeyBusiness says:

    Fed’s Bond ETF balance has reached 1.8 billion. Still small considering size of market, but it’s a jump from 300 million last time.

    Exponential purchase coming?

  33. Island teal says:

    Wolf…Did you or anyone else see the report that WA state UI fund got burned for $100M+ by a Nigerian scam??

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