The media would be remiss if it failed to provide at least a modicum of good news in the middle of the Coronavirus pandemic (is that still a thing?) and nationwide riots. Of course, if you watch the Counterfeit News Network or read The New York Times, you may feel like you need to purchase a lifetime supply of Prozac. But it is not all bad news. All you need to do is look at the latest private payroll data to see that the U.S. is about to embark upon the shortest recession in history. But while you still may need to swallow cartons of Pepto Bismol for the rest of 2020, you can toss those razor blades in the trash!
Fewer Layoffs Than What Bears Say
American businesses eliminated 2.76 million jobs in May to bring the total number of lost jobs to 22.6 million since March, according to a new Automatic Data Processing (ADP) private sector survey. The latest reading is down from the record high 19.56 million in April and beats the market forecast of more than nine million.
Two sectors had accounted for nearly half of the terminations: manufacturing (719,000) and trade, transportation, and utilities (826,000). This was followed by professional and business services (250,000), health and education (168,000), information (115,000), and leisure and hospitality (105,000). Private payroll reductions also occurred mostly at larger companies with 1.6 million fewer positions.
Overall, these industries are reporting a downward pattern, which suggests the job-loss trend already peaked. Unless there is a second wave and the government and the central bank cease extending stimulus and relief measures, this will inevitably be the shortest but most severe recession in history. It can be likened to Ray Jay Johnson’s beloved “You can call me Ray, or you can call me Jay” catchphrase that was funny the first two times, but then triggered global groans thereafter.
On June 5, the Department of Labor will release the official monthly jobs report for May. Analysts are anticipating eight million job losses and an unemployment rate of 19.8%. In just ten weeks, 40 million Americans have lost their livelihood due to governments shutting down the economy and putting the country under house arrest.
Will there be a second-half rebound? Goldman Sachs economists wrote in a research note to clients that the economy is beginning to heal from the Coronavirus pandemic as more businesses reopen. And this could result in a huge spike in economic growth, something that Democratic strategists warn is a boon for President Donald Trump ahead of the presidential election in November.
The Wall Street titan stated:
“We continue to expect a fairly rapid decline in the second half, partly because most newly unemployed workers are on temporary rather than permanent layoff. However, Congress is likely to enact changes to the Paycheck Protection Program that look set to weaken rehiring incentives.”
Where Those Jobs At?
In the COVID-19 economy, there are two types of jobs that have come into focus: consulting and contact tracing. One position is on life support, and the other is a huge opportunity for people looking for work.
Deloitte recently announced that it would lay off 5% of its immense 106,000-person workforce in the U.S. The job cuts are expected to affect every level, from entry to partner. The professional services juggernaut is also anticipated to furlough 1.5% of its employees amid a projected 16% drop in revenues in the fiscal year 2021. The company says that its advisory and consulting business will face a greater impact than its audit and tax wing, which is the new normal for the foreseeable future. A growing number of its clients are reportedly reassessing their budgets for large-scale consulting projects, and social distancing guidelines have prevented consultants from completing on-site work.
This explains why Deloitte terminated 200 consultants and auditors at its Toronto headquarters, and why 99% of KPMG’s staff accepted a 20% voluntary pay cut. It is a blood bath for consultancy experts.
At least there is always contact tracing employment opportunities. According to a new study by researchers at George Washington University, 184,000 contact tracers are needed in the U.S. Tom Friedman, the director of the CDC under former President Barack Obama, believes the figure is closer to 300,000 to limit the spread of COVID-19. The job consists of getting in touch with close contacts of confirmed Coronavirus patients and providing them with information about the virus and testing and then urging them to self-quarantine for 14 days. You read from a script and listen to patients.
Until there is a vaccine, the Coronavirus is here to stay, and the National Association of County and City Health Officials recommends states to have 30 contact tracers for every 100,000 residents.
The American Phoenix
The market does a better job of assessing the labor situation than the government. Homebase, a scheduling software company, maintains a real-time economic indicator of employment and hours worked because many of its customers are in the retail industry. Its data show that the U.S. economy may have already clawed back more than five million jobs of the total number of lost positions eliminated during the nursing-home epidemic. Put simply, the U.S. is beginning to rise from the ashes of the three-month period of loneliness, misery, suffering, and unhappiness that swept the nation.
Read more from Andrew Moran.