As retail sales plunge, one solution remains: REOPEN our economy
Maybe the lockdown is the pause that refreshes both the economy and the stock market, but it’s doubtful.
The Commerce Department reported retail sales plunged a COVID-induced 16.4 percent in April, following an 8.3 percent decline in March. Both marks were record-setters that go back to 1992.
All told, US retail sales are down 21.6 percent over the previous 12-month period, another record.
Hardest hit were clothing, electronics, furniture and restaurants.
JCPenney, J. Crew, Neiman Marcus and Pier One are some of the biggest names to have filed for bankruptcy protection so far.
Already facing pressures from online retailers– with massive amounts of debt necessitated by a massive number of locations– old-fashioned brick and mortar retailers are just another causality of COVID-19.
After posting record low unemployment in February 2020, the economy has suffered from man-made global cooling, with a politically-induced shutdown of all non-essential businesses.
In just a few short months, the economically-reckless decision to shut down our economy has seen unemployment rise to 14.7 percent, with 20 million jobs disappearing in just two months.
That’s comes about to about $1 trillion in missing wages annually at an average wage of $49,764.
“Workers lost jobs at a horrifying rate,” said Nick Bunker, director of research at Indeed, the job listings website. “Employers led with layoffs and hiring slowed, but not as dramatically as one might have expected.”
Well, pretty dramatically if you were one of the non-essential workers who lost a job.
Four million restaurant workers were laid off, along with 1.1 million retail workers. Some of those job losses will prove to be temporary. But the longer the shutdown remains in place, the more slowly those jobs will come back.
“There’s a real risk that if people are out of work for long periods of time,” said Fed Chairman Jerome Powell, “that their skills atrophy a little bit and they lose contact with the workforce. … Longer and deeper recessions tend to leave behind damage to people’s careers. And that weighs on the economy going forward.”
Powell further said that he expects unemployment to reach depression-era numbers of at or near 25 percent.
However, he also claims that the central bank has the financial strength and the will to keep the economy awash with money.
“There’s really no limit to what we can do with these lending programs,” Powell said. “There’s a lot more we can do to support the economy, and we’re committed to doing everything we can as long as we need to.”
Some think that and more will be necessary.
Stephen Moore, an economic consultant for Freedom Works and former Trump campaign advisor say that by fall workers will get tired of Democrat obstruction over reopening the economy.
“Our cities could start to look like Caracas in Venezuela in the weeks ahead,” wrote Moore in The Hill. “At that point, Americans will have enough. My prediction is that they will turn away from the radical leftist ideology and turn to the guy who already has shown that his policies can return our nation to robust and widely shared prosperity.”
President Trump, always the optimist has said that by the end of the year the economy will be again firing on all cylinders again.
The tweeter-in-chief pressed his case by this simple Tweet:
Because the longer the pause in our economy goes on, the harder it will be to refresh those jobs.
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