A Bigger Magic for 22 Million!

A Bigger Magic for 22 Million!

Trump performed one magic: he got Saudi Arabia and Russia on the same table to reduce oil production volume, and then went ahead to promise that the United States of America will reduce its production volume! Read deeper, that is a zen-like strategy. Why? Mr. Trump knew that Covid-19 had reduced the level of production in the American mass-small-scale, shale-mixed oil production volume. Technically, the production volume that Trump promised was not necessary because of the Covid-19 impact in the U.S. energy sector. But with the promise for America to also reduce volume, Saudi and Russia agreed! Oil picked up, marginally; he celebrated.

But one number today shows that Trump needs a bigger magic: “Another 5.2 million workers filed for their first week of unemployment benefits last week, bringing the total number of Americans who have filed initial jobless claims to over 22 million”. That number is tracking the coronavirus pandemic period of 2020!

The month of April has seen a rise in layoffs and consequently unemployment claims. About 13.5% of American workforce has been impacted and more are expected to be laid off in the coming weeks.

“As shutdowns continue, job losses will likely extend into other areas of the labor market, such as business and professional services where firms may begin to see lower revenues from a second order pull back in demand,” said Robard Williams, a senior vice president for Moody’s Investors Service noted.

The layoffs started with service jobs, then workers at restaurants, hotels and retailers felt the hit.

Now the pandemic appears set to touch white collar jobs among others it will likely hit if it doesn’t slow down in the next few weeks.

Making that 22 million to disappear is the magic before Mr. Trump right now.

The U.S. Unemployment Rises As Coronavirus Keeps Businesses Closed

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2 thoughts on “A Bigger Magic for 22 Million!

  1. He also got Mexico to accept the deal, by promising that the US would absorb most of the cuts that would have gone to them; so it looked all good there.

    That of job numbers has no formula, because politicians already created the incentive for filings to skyrocket. They promised benefits on the phase three stimulus package that were above minimum wage; so in a way it was more attractive to be out of job than to remain in low paying one. A classic example of how bad policy can diminish productivity, while politicians keep competing on who can outdo each other on freebies.

    Even subsidising companies to keep people on payroll is useless, because if a country is on lockdown, it makes no sense to claim that people are employed, while businesses remain shut.

    So, while it sounds cool to keep people indoors in order to contain the pandemic, when these scary numbers come up weekly, they make such argument look out of sort.

    So, a balance is needed, else the impending collapse will be of epic proportion. If you play too safe, you lose, and if you play carelessly, it could be a catastrophe. So, while politicians on opposite sides can bicker and squabble all day, if lockdown continues with no end in sight, the economy could disappear.

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    1. “That of job numbers has no formula, because politicians already created the incentive for filings to skyrocket. They promised benefits on the phase three stimulus package that were above minimum wage; so in a way it was more attractive to be out of job than to remain in low paying one” That is revealing indeed.

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