Friday, April 3
The US Bureau of Labor Statistics reported a loss of 701,000 jobs in March, the first monthly decline since 2010. Unemployment rose from 3.5% in February to 4.4%, although this is certainly far below reality due to lagging government reporting methodology. The New York Times reports today that the unemployment rate is likely near 13%, the highest since the Great Depression.
I fear this is just a prelude to far worse economic devastation in coming months. With the abrupt shuttering of most of our service economy, fundamental industries are in shock: restaurants, entertainment, hotels, airlines, retail, energy. Pretty much any business that interacts directly with humans.
In March, retail stores and restaurants took a huge hit, more than twice the Great Recession and four time the Dot Com Bomb. We simply haven’t seen anything like this in many generations.
Of course, some industries will benefit from the pandemic, at least in the short term. The New York Times presents an interesting analysis of how the spending habits of Americans have changed in the past month.
Not surprisingly, supermarkets and food delivery have replaced dining out. And Amazon.com has replaced retail shopping. Netflix has replaced movie theatres. Home repairs have replaced weekend getaways. And people are drinking more alcohol.
Despite all the social disruption and economic pain, there are some silver linings. There will be lower carbon emissions, thus decelerate global warning. Material consumption will ebb. Parents will spend more time with their children. Crime is also down: the media report a 21% drop in the UK and 84% in Peru. Drug arrests in Chicago are down 42%. In March, killings in El Salvador have fallen astoundingly to only two per day — down from a daily peak of 600. Reported rapes in South Africa have declined 86%.
This is certainly welcome news. So there is an upside to everyone staying home. But some fear the rise in domestic violence and the consequences of prolonged confinement — and when restrictions are lifted in a world scarred by severe economic decline. Time will tell.
To close out the work week, I scheduled a happy hour with my team. It’s important to maintain as much social contact as possible during these weeks (and possibly months) of adjustment. In our wider team meeting earlier this week with my boss, we all gave our best guesses for “return to office” pool. The earliest was June 1 and the latest after Labor Day in September (my guess is July 13). We’re all very hopeful for a “V-shaped” recovery… we’ll see!
During our virtual happy hour, we all shared photos of us with long hair, all from our younger days. Rakesh sported a Fabio-esque mane from university, Krishna a teenage pompadour doo, Paul H sent a photo of him in drag! Mine was the year I let it grow, wow was that unmanageable in the final months!
