The Extended Economic Distortion has settled in nine months after the Covid-19 pandemic became a reality in the United States.
As indicated in the chart above, the official unemployment rate (U-3) is at 6.9% which is a 92% increase over the October 2019 rate. On top of that, 12.1% of all Americans who have been identified in some way previously attached to the labor force are out of a job, which is a 75.4% increase over the October 2019 rate.
Those numbers are just indicators that the economy is ill. It's no surprise. As explained here in a post on May 7:
The only goal of the Great Economic Lockdown of 2020 was to slow the spread of Covid-19 cases during the first months of the Coronavirus Crisis. That allowed time to organize enough hospital beds to handle both Covid-19 cases and the normal flow of cases due to other illnesses (you know, cancer, strokes, heart attacks, auto accidents, etc.).
As the Lockdown restrictions are lifted, Covid-19 will continue to spread.The underlying reality for the next "x" number of months (or forever) is that while we struggle to create a new economic and social normal, each day hundreds of people from infants to centenarians will die or become disabled from a Covid-19 infection.
Prognostications from some sources indicate that an economic recovery will begin by the second half of the year. More likely the Coronavirus Crisis will lead to an Extended Economic Distortion.
As with any newly evolved disease, what we know about Covid-19 is limited through what science is learning. We do know it makes folks sick, killing some, worse for older folks.
Wearing a mask reduces your likely impact on others as does social distancing. Logically then, you want to be around people who do those things to protect yourself...if you must be around other people. If you can avoid others you can reduce your chance of infection.
Some of what science has learned to date is well described in How the Coronavirus Hacks the Immune System in this week's New Yorker. (You can download a PDF here.) It isn't straightforward yet, but it is clearly a remarkable advance in the disease world from the diseases' point of view. That used to happen more frequently. But since the 1950's in the U.S. we last confronted such a thing in the HIV pandemic. So far we've essentially contained Ebola outside our country.
It's new. It's not the flu. This happens. Seeking to place blame is a foolish waste of time.
The number of new cases is rising again with all the attendant impacts and choices regarding socializing and business closures.
The headlines in the past two weeks typical for this fall include From Exxon to Charles Schwab, white-collar job cuts are mounting, Mass layoffs in the US as states face unprecedented budget crisis, Nike to layoff 700 people at HQ by January. As businesses realize that mounting cases meaning mounting unemployment, the layoffs will expand as we are a consumer economy.
And as it appears, Joe Biden will take office with news media having told him that "in the month before the election China’s trade surplus with the United States was 46.5 per cent higher than the day Donald Trump took office."
Fasten your seatbelts America, it's going to be a rough couple of years.