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First layoff

Sven
in Off-Topic
This article is several days old. From the article
At the Port of Los Angeles, 145 drivers have been laid off and others have been sent home without pay as massive ships from China stopped arriving and work dried up. At travel agencies in Atlanta and Los Angeles, several workers lost their jobs as bookings evaporated. Christie Lites, a stage-lighting company in Orlando, laid off more than 100 of its 500 workers nationwide this past week and likely will lay off 150 more, according to chief executive Huntly Christie. Meanwhile a hotel in Seattle is closing an entire department, a former employee said, and as many as 50 people lost their jobs after the South by Southwest festival in Austin got canceled.
Economists fear more layoffs in the coming weeks as supply chains come to a halt and people stay home and spend less.
https://www.washingtonpost.com/business/2020/03/11/layoffs-coronavirus/

Is the the beginning of something bigger that translates into recession later this year?

Given that US is largely a service/consumer driven industry, what are the consequences when consumers greatly reduce their spending?

Comments

  • WABACWABAC
    Consumers are generally given credit for driving 70% of the US economy.

    My guess is that the recession has already started.
  • Sven
    I agree. Reuters reported elevated unemployment number. Think this is only the beginning.
    “A number of states specifically cited COVID-19 related layoffs, while many states reported increased layoffs in service-related industries broadly and in the accommodation and food services industries specifically, as well as in the transportation and warehousing industry, whether COVID-19 was identified directly or not,” it said.

    Jobless claims are the most timely labor market indicator. The coronavirus outbreak has forced millions of Americans to hunker down in their homes, with state and local governments escalating “social distancing” policies, closing schools, bars, restaurants and theaters in an attempt to contain the virus.
    https://reuters.com/article/us-usa-economy-unemployment/u-s-jobless-claims-jump-to-two-and-a-half-year-high-coronavirus-blamed-idUSKBN216241
  • beebee
    Your health is more important than a pay check right now. Closures are required to achieve suppression of the virus. Governments should play a role by enforcing and promoting social distancing and isolation (of confirmed cases) while at the same time provide a financial backstop to get through what could be 18 months (a vaccine).

    Here's a article on the likelihood of infection in the US (81%):
    COVID19-NPI-modelling-16-03-2020.pdf
  • WABACWABAC
    New jobless claims numbers came out today.
    Initial jobless claims increased by 70,000 in the week ended Saturday, March 14 to a seasonally adjusted 281,000, marking the fourth biggest jump for jobless claims on record back to 1967. It also brought claims to the highest level since September 2017, following Hurricane Harvey, which struck the U.S. and disrupted business activity.
  • Sven
    @bee, thank you. This particular study and the predicted 2 million fatality in US enabled Dr. Debbie Brix to change the administration's view. Still precious time is lost to response aggressively when COVID-19 spread throughout the globe. California is predicted to have 50-60% infection in next 4 weeks!
  • Sven
    @WABAC, I expect the unemployment number continues to rise rapidly as closing many small business due to the lockdown. How many small business can survive paying their rent and employees without customers? The economic impact is far reaching and could be long-lasting for the next 12 months or longer ONLY if the spreading of COVID-19 can be contained. The number of reported infected patients just doubled overnight in California that containment is far from being successful. The movie "Outbreak" reminds me what we are heading to...

    @bee, I re-read the article you posted 3 times in the last 24 hours. Each time I came to the realization that this country is so ill-prepared for this pandemic event. At work 14-days quarantine is imposed for employees who travel in 75 miles radius from home office in the month of March. And the offices are now empty while everyone are teleworking from home.
  • johnNjohnN
    edited March 2020
    Hi Sven
    Severe global contraction/recessions and take effect on every sectors. Never seen anything like this before. Maybe 24s% GDP reduction next quarter/ hovering - 9% unemployment predictions. Total shut downs in all major cities /world/agencies next 15 days maybe longer. No safe havens in investment world pass few wks.

    Good news are many fronts/ many companies/Govt agencies are working together to solve this crisis. I dont think could have been prevented. We are hoping for the best.

    Many pundits say may take 12 -24 months recovery after a prolong recession. Others say maybe very short V shape recovery and this will pass summer.

    We can only wait and see. At least we will have more data with pharmaceuticals to fight this virus in all fronts and maybe conquer in the near future. Hoping for the very best.

    If you have many yrs left, this event could be another 2008_09 era, stocks so cheap though but dont know if they can even be cheaper next few wks

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