No V-shaped Recovery

First, please read the Disclaimer.

Initial jobless claims in the US for the 6 weeks to April 25th exceed 30 million.

Initial Jobless Claims

That will take unemployment above 20%, with total jobs dropping back to levels last seen in 1997, and more job losses still to come.

Total Employment (Nonfarm Payroll)

Employment is the key to economic recovery. While unemployment is high, consumer spending will stay low and the economy will struggle. Companies may receive bailouts and the Fed will keep financial markets awash with liquidity but that does not help falling sales.

Companies are also likely to shelve expansion plans, with employment growth a shadow of its former self.

Some industries may never fully recover:

Retail Shopping Malls

DJ US Retail REITs


DJ US Airlines

Travel & Tourism

DJ US Travel & Tourism


DJ US Hotels

While others are in for a protracted struggle:

Auto Manufacturers: GM and Fiat-Chrysler.

GM and Fiat-Chrysler

Household Goods and Housing Construction

DJ US Household Goods & Housing Construction


DJ US Banks

...and Consumer Finance

DJ US Consumer Finance

Be prepared. April employment numbers are going to be ugly. Expect some turbulence.

All production is for the purpose of ultimately satisfying a consumer.

~ John Maynard Keynes (1936)


Colin Twiggs is director of The Patient Investor Pty Ltd, an Authorised Representative (no. 1256439) of MoneySherpa Pty Limited which holds Australian Financial Services Licence No. 451289.

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