The economic news out of the US continues to worsen even as the daily death toll once again rises into the thousands. According to a Federal Reserve report on Friday, industrial output fell 11.2% in April, including a 13.7% fall in manufacturing output, the largest decline in the 101-year history of the series.
The Fed said industrial production in April was 15% lower than in April 2019 and back under its 2012 level. Capacity utilisation (the amount of US production of things, not services) fell to 64.9% in April, 14.9% under its long term average and 1.8 percentage points under its all time low in the GFC in 2009.
But US retailing makes industry look healthy. April saw a record 16% slump in US retail sales in April, which succeeded the previous record fall of 8.3% in March. That’s nearly one quarter of retail sales in two months — the value of retail sales in April, US$403.9 billion, was the lowest since 2012, and that’s before inflation.
Friday also saw the news that the JC Penney department store chain — more than 100 years old — had filed for bankruptcy protection, making it the fourth major US retailer to have failed in the current crisis.
Department stories have been struggling in the US for years and JC Penney, like some of its competitors, has been run into the ground by inept private equity owners. A month ago it missed a debt repayment as the impact of the lockdowns worsened, and while it will continue to trade, some stores are closing already, which is not good news for its 85,000 employees.
America’s major department store chain, Macy’s, is also struggling. It will only issue a sales update this week — its first quarter financial performance won’t be released until July, after the close of the second quarter. It too could be headed for real trouble.
The closure of bricks-and-mortar retail in the US is having a disproportionate impact on American women.
As US retail has shifted online — from mall shops to Amazon warehouses — the gender composition began shifting from a workforce dominated by women to one that looks more like the logistics sector, which is far more male.
The pandemic is radically accelerating that, with female jobs in department stores and physical outlets disappearing. 60% of the jobs lost in the US in March were female.
Until March, male and female unemployment in the US tracked very closely between 3-3.5%, with female unemployment often dipping a little below male unemployment. In April, female unemployment surged to 15.5% compared to 13% for men.
As Crikey noted last week, Australia has seen the same gendered impacts of the pandemic in workplaces, with services jobs in hospitality and retail, with high levels of female employment, vanishing.
The experience in Canada is slightly different and may point to what happens next both here and in the US.
Canada suffered the same first-round employment effects in March: women lost jobs at more than twice the rate of men as services jobs suffered (which also inflicted deep cuts in employment among young people).
But in April in Canada, things began evening up: service job losses continued at a frightening pace, but construction and manufacturing jobs were also hit.
As a result, “while women accounted for a disproportionate share of job losses in March, declines in April were larger among men, resulting in a narrowing of the gender gap in cumulative employment losses. Among the total population aged 15 and older, employment losses from February to April totalled 1,537,000 (-16.9%) for women and 1,468,000 (-14.6%) for men”.
That process may also be underway in the US with the collapse in industrial production. For example, automotive manufacturing, the workforce of which is more than 75% male in the US, saw output fall more than 70% in April.
That is, the contraction began in the female- (and youth-) dominated services industries, which were the first to be shut down, but then spread to sectors that continued to operate with some semblance of normality, like construction and manufacturing.
A second wave of joblessness is coming upon us faster than the feared second wave of the virus. As the Canadian experience suggests, it will lead to a gruesome evening up of the genders in a contest no one wants to win.
But Obama said the US was the exceptional nation.
Pretty sure that the other 44 also claimed the same thing – esp Mr Bigly.
And most of them believe it.
They believe it, have you seen the sheer number of flags they fly.
Dunno that it’s just the Benighted States, Toned Abs certainly exhausted the Parliamentary props dept at his pressers.
How many did the Sir Prince Philip presser have?
Eleventy flags…& a podium of epaulettes galore..ious