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HOW FISHER INVESTMENTS REPORT SECOND LAY-OFFS, BACKLOGS WAVE KEEP U.S. UNEMPLOYMENT CLAIMS ELEVATED.. (515 hits)



For Immediate Release From Fisher Investments!


The novel coronavirus crisis continues to pummel the U.S. labor market, with the number of Americans filing for unemployment benefits falling less than expected last week, suggesting a second wave of layoffs in industries and jobs not initially impacted by business closures caused by the pandemic. (https://www.fisherinvestments.com/en-us/marketminder/stocks-and-unemployments-relationship-hasnt-changed
).

The Labor Department’s weekly jobless claims report on Thursday, the most timely data on the economy’s health, supports economists’ contention that it would take a while for activity to rebound even as businesses in many states reopen after shuttering in mid-March as authorities tried to slow the spread of COVID-19, the respiratory illness caused by the virus.

Federal Reserve Chair Jerome Powell on Wednesday warned of an “extended period” of weak growth and stagnant incomes. The economy lost a staggering 20.5 million jobs in April, the steepest plunge in payrolls since the Great Depression of the 1930s. Economic output dropped in the first quarter at its sharpest rate since the 2007-09 Great Recession.

“Unemployment claims still show continuing devastation for American families,” said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia. “The predicted ‘second wave’ of layoffs may have started. This is more layoffs building on the initial layoffs, as middle management and those in support industries lose their jobs.”

Learn more: https://www.reuters.com/article/us-usa-economy/us-weekly-jobless-benefits-to-stay-elevated-as-coronavirus-layoffs-widen-idUSKBN22Q0DQ


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Coronavirus Flare-Ups In China and South Korea Prompt New Fears Of A Second Wave

Fears of a second surge of coronavirus infections are forcing early-hit countries to rethink plans for re-opening as new cases come to light. China is now testing millions of people to catch new infections. South Korea has dispatched several thousand police officers in a renewed push for contact tracing.

Russia, meanwhile, is still facing its first wave. With more than 10,000 new cases reported each day, the country has the second-highest number of confirmed infections in the world, trailing only the U.S.


The city where it all started, Wuhan, China, is on alert again. Over the next 10 days, authorities in China's coronavirus epicenter are testing every one of its 11 million residents after six new coronavirus cases were reported over the weekend.


Learn more: https://www.cbsnews.com/news/china-coronavirus-south-korea-outbreaks-fears-second-wave-infections/


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Coronavirus Slump Is Worse Since Great Depression. Will It Be as Painful?


This piece does an overall nice job showing that “worst since the Great Depression” doesn’t mean “as bad as the Great Depression.” That was a multiyear slump when, as the Fed yanked money out of the economy, industrial production halved and estimates of unemployment hit 25% (the official statistic didn’t exist back then). Unemployment now may be the worst since that era, but as the article demonstrates, the downturn’s causes are worlds different, and it isn’t likely to be anywhere near as long. “As in the Depression, today’s collapse is global. But the scale is smaller, Gita Gopinath, chief economist at the International Monetary Fund, said in a briefing last month. The IMF estimates the world economy shrank about 10% during the Great Depression, versus an expectation of about 3% this year and an expected return to growth next year. Advanced economies shrank about 16% in the Depression, compared with about 6% forecast for this year. A series of severe policy mistakes around the world exacerbated the length and severity of the Great Depression. Central banks tightened monetary policy to maintain the gold standard, which no longer exists. The result was severe deflation, which increased the value of debt and lowered incomes.” Meanwhile, governments were slashing spending, not supporting struggling businesses and households. The policy response this time has been about 180 degrees opposite. So while this period is indeed painful for many, it isn’t a 1930s repeat.

Learn More: https://www.wsj.com/articles/coronavirus-slump-is-worst-since-great-depression-will-it-be-as-painful-11589115601


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Health-Care Industry Loses 1.4 Million Jobs in Pandemic!


The U.S. health-care industry wasn’t immune to the devastating job losses caused by the coronavirus pandemic last month.

Even as health-care workers battled Covid-19 in emergency rooms and intensive-care units across the country, the industry saw 1.4 million jobs vanish in April, the Labor Department reported on Friday. That equates to about one of every 12 health-care jobs.

The largest declines were in outpatient settings such as dental offices, where more than half a million jobs disappeared -- roughly half of that work force. As the virus has spread, many medical offices that deliver routine or elective care have closed as part of social-distancing measures to contain the outbreak.

But even providers treating patients vulnerable to the virus weren’t spared. Hospitals shed 135,000 workers, and nursing and residential care payrolls fell by 113,000. Both numbers represent about a 3% decline from a month earlier.

Employment in diagnostic labs shrank by 11%, or 31,000 jobs, even as the nation struggled to increase the number of coronavirus tests available. Home-health payrolls declined by 6%, or 94,000 jobs.

The drop-off in demand for health care may persist as long as the virus remains a threat.

“There’s a natural cautiousness and reluctance of seniors as well as other people who have comorbid conditions to expose themselves to Covid,” said Dan Mendelson, founder of consultant Avalere Health and an operating partner at Welsh, Carson, Anderson & Stowe.

Learn More: https://www.fa-mag.com/news/health-care-industry-loses-1-4-million-jobs-in-pandemic-55630.html




VISIT: https://www.fisherinvestments.com/en-us


Posted By: agnes levine
Saturday, May 16th 2020 at 6:22AM
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