The Numbers Tell Us That The ‘Economic Recovery’ Is Dead And Businesses Are Failing At A Staggering Pace

Even though economic conditions were absolutely awful, during the month of June the mainstream media kept insisting that the U.S. economy was “recovering” and the stock market kept surging on every hint of good news.  But now the “economic recovery” narrative is completely dead, because the numbers clearly show that the U.S. economy is rapidly moving in the wrong direction.  On Thursday, the Labor Department announced that another 1.416 million Americans filed new claims for unemployment benefits last week.  Prior to this year, the all-time record for a single week was just 695,000, and so we are talking about a level of unemployment that is absolutely catastrophic.  But what is really alarming many analysts is that the number for last week was quite a bit higher than the number for the week before.  Many states are rolling out new restrictions as the number of confirmed COVID-19 cases continues to surge, and this is having a huge impact on economic activity.  For months I have been warning that fear of COVID-19 would prevent economic activity from returning to normal levels for the foreseeable future, and that is precisely what has happened.

Overall, more than 52 million Americans have filed new claims for unemployment benefits over the past 18 weeks, and that makes this the biggest spike in unemployment in U.S. history by a very wide margin.

In fact, this dwarfs all previous spikes by so much that the others are not even worth mentioning.

Of course it isn’t just the employment numbers that are depressingly bad.  According to Jefferies, in late June 19 percent of all U.S. small businesses were closed, but now that number has risen to 24.5 percent

As of Sunday, 24.5% of small businesses in the United States were closed, according to Jefferies. That is worse than late June, when only 19% were closed. Jefferies pointed to “particular weakness in COVID hot spots” and noted that small business employment had dropped to levels unseen since the end of May.

Just think about that number for a minute.

Nearly a quarter of all small businesses in the entire country are closed.

And the really bad news is that many of them will never end up reopening.

At the beginning of the pandemic, I received a lot of criticism for stating that many of the small businesses that were shutting down at that time would never open again, but over the long-term the numbers have shown that I was correct.

In fact, Yelp says that a whopping 60 percent of the restaurants that were initially listed as “temporarily closed” on their site are now classified as permanently closed…

It’s tough out there for restaurants and other small businesses.

Yelp’s Economic Average report out Wednesday shows exactly how tough: 60 percent of the 26,160 temporarily closed restaurants on the business review site as of July are now permanently shut. Temporary closures are dropping, and permanent shutdowns are increasing.

Fear of COVID-19 is going to cause a large portion of the population to continue to avoid restaurants for as long as this pandemic persists, and it is becoming clear that it is likely to persist for a long time to come.

We are going to lose so many small and independent places to eat.  Many of the big corporate chains that have very deep pockets will survive, at least for a while, but there is simply no replacing what small and independent restaurants mean to our communities.

Bars and clubs are being hit extremely hard as well.  According to Yelp, 44 percent of the bars and clubs on their site that were initially listed as “temporarily closed” have now been shut down on a permanent basis…

Bars and clubs are also closing forever at high rates: 44 percent (as of July) of 5,454 temporarily shuttered bars and other nightlife establishments are shut for good.

Other sectors of the economy are doing relatively better, but the overall outlook for small businesses in America is exceedingly bleak.

In New York City, it is being projected that one-third of all small businesses will never be able to open again…

As many as 76,000 small businesses in New York City – a third of the 230,000 citywide – may never reopen after forced to close during the COVID-19 lockdown, business leaders have warned.

The Partnership for New York City, a not-for-profit organization that connects business leaders with local government, predicted that 76,000 small businesses will never be able to reopen in a report produced by 14 consulting firms.

I know that number is hard to believe, but this is actually happening.

Our politicians want to encourage people “to go back to work”, but for millions upon millions of Americans the jobs that they once had are gone forever.

Air travel is another industry that is being absolutely devastated by this pandemic.  After a modest bounce in June, the number of air passengers is starting to fall again

The resurgence of coronavirus infections is derailing the travel industry’s modest recovery. The number of air passengers processed through TSA security lines fell during the week ended July 20, compared with the prior week, according to Bank of America. This metric is down more than 70% from a year ago.

United (UAL) CEO Scott Kirby told CNBC on Wednesday that the airline doesn’t “expect to get anywhere close to normal until there’s a vaccine that’s been widely distributed to a large portion of the population.”

All of the numbers that I have shared in this article tell us that we are in an economic depression.

Many had hoped that this economic downturn would be short-lived and that a “V-shaped recovery” would commence once the coronavirus lockdowns were lifted.

But instead a resurgence of cases has caused new restrictions to be implemented, and economic activity is slowing down again.

The bottom line is that all of us need to get prepared to weather a long-term economic storm that is going to be incredibly painful.

The last recession was bad, but it isn’t even worth comparing to the times that we are entering now.  All of our lives are being turned upside down, and a lot of people are not going to be able to handle what comes next.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse BlogEnd Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

Economic Recovery? 13 Of The Biggest Retailers In America Are Closing Down Stores

Closed Sign - Photo by JamesAlan1986

Barack Obama recently stated that anyone that is claiming that America’s economy is in decline is “peddling fiction“. Well, if the economy is in such great shape, why are major retailers shutting down hundreds of stores all over the country? Last month, I wrote about the “retail apocalypse” that is sweeping the nation, but since then it has gotten even worse. Closing stores has become the “hot new trend” in the retail world, and “space available” signs are going up in mall windows all over the United States. Barack Obama can continue huffing and puffing about how well the middle class is doing all he wants, but the truth is that the cold, hard numbers that retailers are reporting tell an entirely different story.

Earlier today, Sears Chairman Eddie Lampert released a letter to shareholders that was filled with all kinds of bad news. In this letter, he blamed the horrible results that Sears has been experiencing lately on “tectonic shifts” in consumer spending

In a letter to shareholders on Thursday, Lampert said the impact of “tectonic shifts” in consumer spending has spread more broadly in the last year to retailers “that had previously proven to be relatively immune to such shifts.”

“Walmart, Nordstrom, Macy’s, Staples, Whole Foods and many others have felt the impact of disruptive changes from online competition and new business models,” Lampert wrote.

And it is very true – Sears is doing horribly, but they are far from alone. The following are 13 major retailers that are closing down stores…

#1 Sears lost 580 million dollars in the fourth quarter of 2015 alone, and they are scheduled to close at least 50 more “unprofitable stores” by the end of this year.

#2 It is being reported that Sports Authority will file for bankruptcy in March. Some news reports have indicated that around 200 stores may close, but at this point it is not known how many of their 450 stores will be able to stay open.

#3 For decades, Kohl’s has been growing aggressively, but now it plans to shutter 18 stores in 2016.

#4 Target has just finished closing 13 stores in the United States.

#5 Best Buy closed 30 stores last year, and it says that more store closings are likely in the months to come.

#6 Office Depot plans to close a total of 400 stores by the end of 2016.

The next seven examples come from one of my previous articles

#7 Wal-Mart is closing 269 stores, including 154 inside the United States.

#8 K-Mart is closing down more than two dozen stores over the next several months.

#9 J.C. Penney will be permanently shutting down 47 more stores after closing a total of 40 stores in 2015.

#10 Macy’s has decided that it needs to shutter 36 stores and lay off approximately 2,500 employees.

#11 The Gap is in the process of closing 175 stores in North America.

#12 Aeropostale is in the process of closing 84 stores all across America.

#13 Finish Line has announced that 150 stores will be shutting down over the next few years.

These store closings can be particularly cruel for small towns. Just consider the impact that Wal-Mart has had on the little town of Oriental, North Carolina

The Town’n Country grocery in Oriental, North Carolina, a local fixture for 44 years, closed its doors in October after a Wal-Mart store opened for business. Now, three months later — and less than two years after Wal-Mart arrived — the retail giant is pulling up stakes, leaving the community with no grocery store and no pharmacy.

Though mom-and-pop stores have steadily disappeared across the American landscape over the past three decades as the mega chain methodically expanded, there was at least always a Wal-Mart left behind to replace them. Now the Wal-Marts are disappearing, too.

Of course there are many factors involved in this ongoing retail apocalypse. Competition from online retailers is becoming more intense, and consumer spending patterns are rapidly changing.

But in the end, the truth is that you can’t get blood out of a rock. The middle class in America is shrinking, and there just isn’t as much discretionary spending going on as there used to be.

And now that we have entered a new economic downturn, many retailers are finding that there are some local communities that can no longer support their stores. The following comes from CNBC

Though the shift to online shopping is no doubt playing a role in lighter foot traffic at malls, there’s more to their changing economics than the rise of Amazon. Changing demographics in a town are another reason a shopping center could struggle or fail — for example, if massive layoffs in a particular industry cause people to move away to find employment.

“A lot of people want to try and tie it to the Internet or ‘that’s not cool,’ or teens don’t like it,” Jesse Tron, a spokesman for industry trade group International Council of Shopping Centers, told CNBC last year. “It’s hard to support large-format retail in those suburban areas when people are trying to just pay their mortgage.”

In order to have a thriving middle class, we need good paying middle class jobs. Unfortunately, our economy has been bleeding those kinds of jobs quite rapidly. For example, Halliburton just announced that it is eliminating 5,000 more jobs after getting rid of 4,000 workers at the end of last year.

During the Obama years, good paying middle class jobs have been getting replaced by low paying service jobs. At this point, 51 percent of all American workers make less than $30,000 a year.

And there is no way that you can support a middle class family with children on $30,000 a year.

We have an economy that is in the process of failing. We can see it in the explosion of subprime auto loans that are going bad, we can see it in the hundreds of retail stores that are shutting down, and we can see it in the tens of thousands of good paying energy jobs that are being lost.

During the Obama years, interest rates have been pushed to the floor, the Federal Reserve has created trillions of dollars out of thin air, and the size of our national debt is getting close to doubling. Despite all of those desperate measures, our economy continues to crumble.

We stole from the future to try to paper over our failures and it didn’t work. Now an economic downturn that will ultimately turn out to be even worse than the “Great Recession” of 2008 and 2009 has begun, and our leaders have absolutely no idea how to fix things.

I wish I had better news to report, but I don’t. Get prepared now, because very rough times are ahead.

(Originally published on The Economic Collapse Blog)

This Is Your Recovery And This Is Your Recovery Without Drugs

Average Hourly Earnings

Does this chart portray an economic recovery in any way? Wages have been stagnant since the START of the supposed recovery in 2010. Real median household income, even using the highly understated CPI, is on a glide path to oblivion. You just need to observe with your own two eyes the number of Space Available signs in front of office buildings, strip centers and malls across America to realize we have further to fall. Low paying, part-time burger flipping jobs aren’t going to revive this debt saturated economic system. But at least the .1% are enjoying their Federal Reserve created high. Fiat is a powerful drug when administered in large doses to addicts on Wall Street.

The S&P 500 has risen from 666 in March of 2009 to 1,972 today. That is a 196% increase in a little over five years. During this same time, real household income has fallen by 7%. There have been a few million jobs added, while 11 million people have left the labor market. According to Robert Shiller’s CAPE ratio, the stock market valuation has only been higher, three times in history – 1929, 1999, and 2007. He seems flabbergasted by why valuations are so high. Sometimes really smart people can act really dumb.

The Federal Reserve balance sheet was $900 billion before the 2008 financial crisis. Today it stands at $4.4 trillion. The Fed has increased their balance sheet by 220% since the March 2009 market lows. Do you think there is any correlation between the Fed puppets printing $2.4 trillion and handing it to their Wall Street puppeteers, who used their high frequency trading supercomputers and ability to rig the markets so they never lose, and the third stock bubble in the last 13 years? It’s so self evident that only an Ivy League economist or CNBC anchor wouldn’t be able to see it.

(Read the rest of the story here…)

 

What economic recovery? How poverty is moving to suburbs

Poverty - Public Domain

During the 2000s, the poor population living in high-poverty urban neighborhoods grew by 21 percent to reach 5.9 million. In the suburbs it more than doubled, swelling by 105 percent to reach 4.9 million.

By the end of the decade, suburbs were home to nearly as many high-poverty census tracts as cities, based on American Community Survey data from 2008-2012. Almost half of all metro area poor residents in high-poverty tracts lived in suburbs.

During the 2000s, all but three of the top 100 metro areas saw a rise in the number of suburban poor living in high-poverty communities, defined as those with 20 percent or more in poverty, or distressed neighborhoods, where 40 percent or more live in poverty. Metro areas in the South posted some of the biggest increases, including in Winston-Salem, North Carolina; Augusta, Georgia; Greenville, South Carolina; and Atlanta.

Based on the 2008-2012 data, some 38 percent of poor suburban residents lived in neighborhoods with poverty rates of 20 percent or more—up from 27 percent in 2000.

(Read the rest of the story here…)

Do NOT follow this link or you will be banned from the site!