Do you know what would happen if a million Americans lost their jobs? It would be a catastrophic event for the economy. Unfortunately, the Federal Reserve projects that over a million Americans could lose their jobs in the coming months. However, Fed projections tend to be overly optimistic. So, what will the actual number be? Things will be much worse than what most experts are currently predicting. Challenger, Gray & Christmas report that the number of layoffs during the first three months of 2023 was 396 percent higher than in 2022. Negative momentum has been building up, and much fear exists.
PacWest is an example of a company that has experienced fear and negative momentum. Their stock price plummeted 22 percent on Thursday, and overall, PacWest’s stock is down almost 80 percent in 2023. Furthermore, the number of layoffs has been increasing. The economy needs to look better, and the future is uncertain.
Shares of PacWest declined again on Thursday after the bank reported deposit outflows in early May. The stock fell by 22.7%, continuing its downward trend. PacWest’s shares have fallen by over 50% this month and almost 80% for the year. Despite the media attention, PacWest is similar to several other regional banks that are essentially insolvent. As I have previously noted, banks tend to become more cautious with their finances when encountering difficulties. This phenomenon is already evident across the United States.
Earlier this year, businesses and households had already faced difficulties borrowing money. However, after three US regional banks collapsed and a series of rate hikes by the Federal Reserve, obtaining money has become even more challenging.
Before the failure of three US regional banks and a series of rate increases by the Federal Reserve, it was already challenging for businesses and families to borrow money. However, things have gotten more challenging.
According to the Federal Reserve’s quarterly Senior Loan Officer Opinion Survey (SLOOS), released Monday, more lenders have tightened their criteria in response to the banking industry’s ongoing unrest.
According to the Fed study, survey respondents ascribed the changes in lending requirements to economic uncertainty, a decreased appetite for risk, a decline in collateral values, and general worries about banks’ financing costs and liquidity problems. Additionally, lenders anticipate tightening standards for the remainder of this year across all loan categories, citing the issues above and consumer withdrawals.
Economic activity will slacken if individuals and businesses have less credit available.Additionally, more enterprises will experience difficulties or fail when economic activity slows.Additionally, this will result in more layoffs.The number of initial jobless benefit claims has risen to its highest level in almost two years.The number of Americans requesting unemployment benefits rose to its highest level since 2021 last week, the most recent indication that the extraordinarily tight labor market is slowing down in response to increasing interest rates.
According to Labor Department data released on Thursday, initial claims for the week ending May 6 increased by 22,000 to 264,000, exceeding the 2019 pre-pandemic average of 218,000 claims. Since October 2021, it has represented the steepest level for unemployment claims.This increase was abrupt.
The beginning, nevertheless, is only now. According to Fox Business, if current Fed estimates are correct, more than a million Americans may soon lose employment.Most of us do not think the Fed’s predictions will come true. The coming few years will witness astronomically significant job losses.Our society’s state will continue to deteriorate as the economy declines.Given how drastically things have already degraded, many of you may find it difficult to believe that.Organized retail theft currently occurs on a massive scale in San Francisco and other cities nationwide. Consider what is happening, for instance, at a Target close to Union Square in San Francisco.
This is something we have never seen before, which is why so many firms have already fled the city.
When asked why the lipstick and nail paint had just been supplied that morning, another employee said, “Now they are empty.”
If Americans are acting in this manner today, when the economy is at least relatively steady, how will they act when we are experiencing a full-blown economic nightmare?
The only thing that has prevented our country from devolving into total anarchy is our comparatively robust economy.
Things will become quite frightening once our economic power is compromised.
Therefore, let us hope for the best while preparing for the worse.