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I'm not arguing that everything is peaches and cream. It's quite to the contrary.
All I am saying is that we have to have two consecutive quarters of negative GDP before officially being in recession. The layoffs, selloffs, and every other "off" you can think of will certainly be going on throughout that time and technical definitions don't really matter much to people who have lost their jobs, but we won't be officially in recession for a number of months at the earliest.
Basically, people need to start preparing for the worst now because it certainly looks like we're heading in that direction. And fast.
We are definitely heading for the worst - and fast.
That is what happened on Friday. The US Commerce Department reported that retail and food service sales in April posted their biggest decline on record, plummeting 16.4 percent from the previous month, and 21.6 percent from the same period a year earlier. The venerable J C Penney chain filed for bankruptcy this week. Since Penney's anchors a lot of malls, many smaller stores in the mall will also pull out if Penney's disappears.
The nation's factories also took it on the chin. The US Federal Reserve said on Friday that total industrial production fell 11.2 percent in April - the largest monthly drop in the 101-year history of the index - while factory output collapsed 13.7 percent - also the worst ever recorded.
To get an idea of the scale of the carnage - in February, the US unemployment rate was hovering near a 50-year low at 3.5 percent. In April, it skyrocketed to 14.7 percent. That month alone, more than 20 million Americans lost their jobs.
"The coronavirus-induced recession has caused significant damage to the economy that the easing of social distancing measures alone won't fix," said Oxford Economics lead US economist Oren Kachkin in a note to clients. "We forecast that industrial output losses will not be recovered until late-2021.
Earlier this week, Federal Reserve Chairman Jerome Powell warned that the US could be facing a protracted period of weakness and said more government spending may be necessary to avoid long-term economic damage.