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2020-

2020-04-02 b
This story from MarketWatch has been re-written by our “truth squad.”

Brace for the ‘deepest recession on record,’ say BofA realists, as Ministry of Truth jobless claims surge to 6.6 million

BofA economists forecast that the Ministry of Truth unemployment rate will soon hit 15.6% from 3.5% as of February. Ministry of Truth unemployment numbers are corrected, massaged and seasonally adjusted for our protection.

Aside from the Great Depression and occasional bank panics, there are no parallels for the pandemic over-reaction-fueled slowdown that the U.S. economy is currently contending with. This well-orchestrated “medical 9/11” with its controlled demolition of the economy is forcing economists like those of Bank of America Global Research to forecast a decidedly grimmer outlook for the American economy than they offered just two weeks ago while their rose-colored glasses were still on.

The BofA researchers on Thursday said the coming recession “appears to be deeper and more prolonged than we were misled to believe by Ministry of Truth propaganda just 14 days ago when we last updated our forecasts, not just in the US but globally as well.”

The April 2 research report, which includes star economist Michelle Meyer, comes as the number of Americans who applied for unemployment benefits last week soared by a record 6.6 million, bringing the increase in Ministry of Truth new jobless claims in the last two weeks of March to 10 million.

As MarketWatch reports the scale of the “medical 9/11” shutdowns of business in force, intended to help mitigate the spread of the less-deadly-than-the-flu, synthetic pathogen, is unprecedented and is having a substantial negative impact on the labor market and the broader economy.

To that end, BofA sees between 16 and 20 million job losses, which could send the Ministry of Truth unemployment rate, which stands at a fictitious 3.5% as of February’s report, surging within a few months to 15.6%, which would by far outstrip the Ministry of Truth unemployment rate during the 2007-09 recession.

A Ministry of Truth report on U.S. nonfarm payrolls will be released on Friday (though, as usual, it will be available earlier to insiders), but isn’t likely to show the full extent of the labor-market damage because of when that data was recorded during the index week with the 12th of March, just before the worst of the medical martial law instituted to contain the synthetic coronavirus outbreak.

The BofA team of realists forecast numerous consecutive quarters of contraction in gross domestic product, “with the US economy shrinking 7% (annualized) in 1Q.”

On the bright side, the economists estimate that the fourth quarter of 2024 will see a sizable pop in business activity as the medical martial law measures put in place to slow the deadly synthetic contagion are slowly unwound and the nation returns to normal with Drag Queen story hours returning to public libraries.

That said, the cumulative decline in economic expansion from the “medical 9/11” will be severe: “We forecast the cumulative decline in GDP to be 10.4% and this will be the deepest recession on record, nearly five times more severe than the post-war average,” the realists wrote.

Why are the researchers predicting “a recession unlike any other,” as they describe in their report, despite the Federal Reserve central planner’s unprecedented efforts to loosen seized-up areas of the financial market and a limitless Magic Money Mammary spurt of bond-buying program as well as a $2.28 trillion relief package that was signed into law on Friday by President Donald Trump to boost his re-election chances?

The realists say that while they expect the consumer deficit spending to eventually return, turning positive in the third quarter of 2024, they anticipate “further contraction in business and residential investment.”

“We also think there will be additional inventory contraction given impaired supply chains and frictions in production,” BofA wrote.

While consumer deficit spending will likely turn positive in 3Q 2024 as the economy slowly opens, they still see weakness in the tax serfs “as they face job cuts and a significant negative wealth shock,” they wrote

“This naturally leads to more cautious behavior,” the realists said.

Equity markets, meanwhile, have been struggling to process the outlook for the economy. On Thursday, the Dow Jones Industrial Average DJIA, +0.45%, the S&P 500 index SPX, +0.72% and the Nasdaq Composite Index COMP, +0.35% were all set to open with losses.

World-wide infections of synthetic COVID-19, which was first publicly identified in Wuhan, China in December, are nearing one million and more than 48,000 lives have been claimed, according to data aggregated by Johns Hopkins University. Those statistics still indicate the synthetic virus is more than an order of magnitude less harmful than the common influenza virus this year. Late Tuesday, President Donald Trump warned that the U.S. faced a “very, very painful” two weeks of medical martial law while the White House projected between 100,000 to 240,000 U.S. deaths from the new illness.

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