This article was originally published by Michael Snyder at The Economic Collapse Blog.
How would you feel if a million Americans lost their jobs? Would you consider that to be a pretty catastrophic event for the economy? Well, as you will see below, even the Federal Reserve is projecting that more than a million Americans could lose their jobs in the months ahead.
Needless to say, Fed projections are usually wildly optimistic. So what will the real number be? Ultimately, I think that things are going to be far worse than most experts would dare to imagine right now. According to Challenger, Gray & Christmas, the number of layoffs during the first three months of this year was 396 percent higher than the number of layoffs during the same period in 2022. A tremendous amount of negative momentum has been building up, and there is a whole lot of fear out there.
Fear of what could happen to PacWest drove their stock price 22 percent lower on Thursday. Overall, PacWest is now down close to 80 percent so far in 2023…
Shares of PacWest were under pressure once again Thursday after the struggling regional bank said that deposit outflows resumed in the first week of May.
The stock dropped 22.7%, further extending its recent declines. PacWest’s shares have now fallen more than 50% this month and nearly 80% for the year.
The only reason why PacWest’s stock price is falling so rapidly is because it is getting a lot of media attention.
If you look closely at the numbers, PacWest really isn’t that much different from hundreds of other regional banks that are essentially insolvent at this point.
As I keep telling my readers, when banks get into trouble they start getting really tight with their money, and this is already happening all over the country…
It was already difficult for businesses and households to borrow money earlier this year — but after the collapse of three US regional banks and a cascade of rate hikes by the Federal Reserve, getting money has become a little harder.
More lenders have stiffened their standards in the wake of increasing turmoil within the banking sector, according to the Federal Reserve’s quarterly Senior Loan Officer Opinion Survey (SLOOS) released Monday.
Survey respondents attributed the changes in lending standards to economic uncertainty, a reduced appetite for risk, deterioration in collateral values and broader concerns about banks’ funding costs and liquidity positions, according to the Fed report. Additionally, lenders reported that they expect to tighten standards across all loan categories for the remainder of this year, citing the above concerns as well as customer withdrawals.
If businesses and consumers have access to less credit, economic activity will slow down.
And as economic activity slows down, more businesses will get into trouble or fail completely.
And that is going to mean more layoffs.
In fact, initial claims for unemployment benefits just jumped to the highest level in nearly two years…
The number of Americans filing for unemployment benefits last week jumped to the highest level since 2021, the latest sign the historically tight labor market is cooling off in the face of rising interest rates.
Figures released Thursday by the Labor Department show initial claims for the week ended May 6 surged by 22,000 to 264,000, well above the 2019 pre-pandemic average of 218,000 claims. It marks the steepest level for jobless claims since October 2021.
This was a very sharp rise.
According to Zero Hedge, it was actually “a 4-sigma miss to expectations”…
The print was a 4-sigma miss to expectations, and was above the highest forecast made by the 45 economists participating in the survey.
But this is just the beginning.
According to Fox Business, if current Fed projections are accurate more than a million Americans will soon lose their jobs…
The most recent projections from the Fed show that officials expect unemployment to rise to 4.6% by the end of next year, up from the current rate of 3.5%.
That could mean more than 1 million Americans lose their jobs between now and the end of the year.
Of course, many of us do not believe that the Fed’s projections will be accurate.
Personally, I expect to see absolutely massive job losses over the next couple of years.
And as the economy steadily deteriorates, the condition of our society will get even worse than it is right now.
For many of you, that may be hard to believe, because things have already deteriorated quite dramatically.
In San Francisco and other cities around the nation, organized retail looting now happens on an industrial scale. For example, just check out what is going on at a Target near San Francisco’s Union Square…
“I’d say 10 thefts a day,” said one worker at the Target inside the Metreon, a mall near San Francisco’s Union Square. The worker spoke on the condition of anonymity because they did not have permission from a supervisor to talk to the press.
“Every 10 minutes you see it,” another worker said who also did not wish to be named. “Look in some corner of the store, and you’ll see people shoveling stuff into a bag—food, cosmetics.”
We have never seen anything like this before, and this is why countless businesses have already left the city.
Another worker that was interviewed noted that lipstick and nail polish had just been stocked that morning “and now they’re empty”…
A third worker who also spoke on the condition they not be named said lipstick and nail polish, which are not locked behind plastic, are regularly stolen in handfuls.
“They were stocked this morning, and now they’re empty,” the worker said, pointing to an empty shelf reserved for lipstick.
Another worker said food and diapers are commonly stolen.
If this is how Americans are behaving now, while economic conditions are still at least somewhat stable, how will they behave when we are in the midst of a full-blown economic nightmare?
Our relatively strong economy has been the only thing that has kept our nation from descending into complete and utter chaos.
Once our economic strength is crippled, things are going to get really frightening.
So let us hope for the best, but let us also get prepared for the worst.
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