The cornavirus has through a monkey wrench into the economy because even though the US economy is 70% is a service economy, the virus has meant we had to learn and practice the term social distancing. The economy is based on people meeting people and if you belong to any groups you enjoy them. If you like sports – going to the stadium, cheering for the home team and celebrating afterwards is part of normal routine. The virus has meant all of those things people in general enjoy can not be done. If you consider how many people made a living from your enjoyment, you begin to understand how the jobless numbers skyrocketed.
In an article by Lucia Mutikani of Reuters she notes the Labour Department releases the weekly jobless claims report every Thursday. The numbers which will likely get larger is the reason the President signed the $2 trillion stimulus package. It is also the reason why the President can not seem to get over the economy was doing so well and now the economy is a recession.
The 3.28 million claims easily beat out the previous record of 695,000 set in 1982. In 2008 when the banks were on the verge of collapse, 665,000 claims were processed.
Layoffs were concentrated in food service, health care, social assistance, arts, entertainment and recreation, transportation and warehousing and manufacturing industries.
Linking to dividend paying stocks, companies that tend to do well in the downturns as well as upturns include: utilities, food distributors, information technology, telecoms, banks and pharmaceuticals. There is a reason to own the stocks because people need to pay bills and if they have to pay the bills on a regular basis, so much the better for the investor.
There are more questions than answers, till the next till – to raising questions,