Another Thursday and another initial claims report. For the week ending 3 October, 840,000 Americans filed an initial claim – higher than market expectations. Despite being several months into this pandemic and a supposed V-shaped recovery, we’re still witnessing massive weekly filings of over 800,000. The prior week’s figure was revised upward by 12,000 to 849,000. Recall that last week, the Department of Labor noted that the state of California will be “pausing” the release of their figures due to their backlog of claims and to implement a fraud prevention system. This delay is not trivial in our estimation and will only serve to further distort the jobs market. Overall, for the week ending 19 September, 25.5 million Americans are still claiming unemployment insurance benefits. This is a week-over-week decrease of around 1 million. This is trending in the right direction, but may reverse sharply due to the California pause and the nearing exhaustion and expiry of various “stimulus” policies. We also know through the official jobs report released last Friday, that permanent job losers now stand at 3.8 million. This is a level not seen since 2012 and this is a structural, long-term issue that is not likely to be remedied in the near-term. We also know through various surveys and announcements that many corporations are soon to layoff employees in significant numbers. The downstream effects this will have on the broader economy will likely create further downward pressure, thus continuing the recessionary spiral.
We also discuss a couple political news events and a recent interview with famed short-seller and hedge fund manager Jim Chanos. Chanos notes the potential severity of a commercial real estate collapse, which he deems quite probable, while also stating that weakness in this area was occurring prior to the pandemic. However, he notes that in the Nobody CARES Act, there is a change in the accounting rules that allows corporations to create different “buckets” that shield them from fully disclosing the true effects associated with the pandemic. If corporations should so choose to use this provision from the Nobody CARES Act, then this will likely serve the purpose of making them appear more financially sound than they really are – thus the day of reckoning has not be thwarted, but rather only delayed. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Jobs #Bailouts #USA #Inflation #Gold #Silver #Debt #Liberty #Revolution #BananaRepublic #EndTheFed #Recession #Depression #Elections