Jobs Report: March 2020

Due to the government’s shut down from the SARS-Covid-2(Covid-19), many businesses are feeling the economic impact of these measures. This policy, to minimize contact and maintain a certain amount of space between individuals( social distancing), alters the way businesses can operate.
If, for example, a business has a large amount of cash reserves, it maybe able to maintain its operations, meet payroll for its employees, and push through this shutdown period. However, for many small businesses, that is not the case. Since payroll is the largest expense to a business, employees are let go. These employees now are unemployed, now there means to generate income is via unemployment insurance benefits. What about the business owner? What is his fate? He(she) will be living off of the capital accumulated; assuming there is capital accumulated.

The graphs listed below show the impact of the unemployment statistics(some) for March 2020. Service industry(restaurant, bar, hospitality, and travel) are impacted the most by the Covid-19 policy measures. It is safe to assume this sector is also one of the highest filers of unemployment insurance. At this point, I do not have any data to support that claim, as it is simply a hypothesis. Nonetheless, hopefully many businesses can re open soon, and begin earning handsome profits.

Leisure and Hospitality Comprise the largest percentage of workers impacted by the shut down.

Coronavirus Qualified Plan Relief: 401(k) withdrawal penalties waived due to Coronavirus

The 401(k) plan has many benefits and restrictions. Currently, due to the crisis from the coronavirus, Congress has waived some of the penalties, and increased the loan amount— along with altering other provisions.

Read more here:
https://fortune.com/2020/03/27/401k-withdrawal-penalties-waived-retirement-accounts-loans-retirees-coronavirus-stimulus-package-cares-act-relief-bill/?fbclid=IwAR2_x6jmPGN5fiYcMSZR6ae-II6WJzd9wnbLeYmRQ3bKeTbsFyC0CFEEKcc

US Public Pension Funds Have Lost $1 Trillion in Recent Weeks

“For 2020, pension investment losses could be nearing $1 trillion, according to Moody’s analyst Thomas Aaron. He said this year’s losses will significantly compound the underfunded liabilities currently measured by most public pension funds.

Q4 2019 hedge fund letters, conferences and more

Meanwhile, the economic fallout from the coronavirus is weighing on revenue and threatening to keep government agencies from affording their soaring pension costs. He said the credit impact of the 2020 pension investment losses will depend on a variety of factors. Some of those factors include the severity of the asset declines, each government’s funding and cash flow position, and each agency’s ability to absorb cost increases in their budgets.

If the markets do not bounce back dramatically in 2020, he expects pension investment losses to soar so high that many state and local governments will see damage to their credit quality. Such damage may be due to already heightened pension liabilities and having less capacity to defer costs.“

Read more here: https://www.zerohedge.com/news/2020-03-27/us-public-pension-funds-have-lost-1-trillion-recent-weeks