Chart of the Week

These Charts Put the Historic U.S. Job Losses in Perspective

Published

1 month ago

April 17, 2020

Jeff Desjardins

These Charts Put the Historic U.S. Job Losses in Perspective

When recessions hit, it’s not unusual to see millions of jobs lost.

Such episodes are a regular part of the business cycle and when they occur, most businesses do their best to tough things out. Then, as time progresses, it gradually becomes clear that spending must be curtailed, budget cuts must be made, and workers must unfortunately be sent home.

This economic process normally takes months, or even years, to unwind.

But, the COVID-19 pandemic has thrown a wrench into the economic status quo, creating a situation that is incomparable to any previous downturn. Instead of a gradual economic transition to slower growth prospects, business operations have suddenly screeched to a halt with no clear window to resume.

Beyond Comparison

The Great Lockdown of the economy has been completely unprecedented, both in terms of the speed of the shutdown and its impact on jobs.

As a result, the statistics being released are completely surreal. Perhaps the best example of this is number for initial jobless claims in the U.S., which tops 22 million over the last four weeks.

Worst U.S. Job Losses on Record (Four Week Period)

Year	Description	Peak Jobless claims (4-wk total)	% of U.S. Population
1975	Stagflation	2.24 million	1.0%
1980	Fed tightening (Volcker)	2.52 million	1.1%
1982	Double-dip recession	2.70 million	1.2%
1991	Early 1990s recession	2.00 million	0.8%
2001	Dotcom Bust	1.96 million	0.7%
2009	Great Recession	2.64 million	0.9%
2020	The Great Lockdown	22.03 million	6.7%

Source: FT

As you can see above, the number is 10x higher than many of the worst four-week job losses on record, so historical comparisons don’t come close.

In other words, if you were using recent recessions as a potential barometer of how bad things could get for jobless claims, the numbers coming from COVID-19 crisis just blew up your model.

The Recession Time Machine

To get further context on the numbers above, it’s worth jumping in a time machine to revisit what happened to job numbers in previous recessions:

Stagflation and Oil Shocks (1973-75)
This recession put an end to the Post WWII global economic expansion, and was characterized by the 1973 oil embargo, the aftermath of the Nixon Shock, and the collapse of the Bretton Woods system of international finance. Unemployment and inflation were both high (stagflation), and the unemployment rate in the U.S. reached 9.0% in May 1975.
The Double-Dip Recession (1980, 1981-1982)
This “W-shaped” recession saw economic contraction first in 1980, only to return again in 1981. This corresponded with the Iranian Revolution, as well as Fed chair Paul Volcker’s aggressive policy to rein in inflation with high interest rates. Unemployment peaked at 10.8% in 1982 — the highest rate seen since the Great Depression.
The Great Recession (2009)
The most recent recession in memory peaked with 10.0% in unemployment in October 2009. It took until 2016 for unemployment to fall back to pre-recession levels.

Finally, it’s worth noting that during the Great Depression (1929-1933), unemployment reached a historic high of 24.9%. To get to a comparable equivalent in modern times, there would need to be 41 million Americans out of work permanently.

Room for Optimism

Although the initial jobless claims are staggering and clearly without modern precedent, there is a case to be made for cautious optimism.

Many of the aforementioned recessions took months or years to culminate, with peak job losses occurring at the tail end of each recession. The current crisis, now being called “The Great Lockdown”, caused many businesses to shut doors suddenly and against their will. It also corresponded with unexpected closures of national borders and the halting of regular trade activity around the world.

When and if normal economic activity resumes, it’ll be interesting to see how much of the damage is temporary.

Editor’s note: While we show the figure for peak unemployment during the Great Depression in both the chart and article, there is no comparable number available for weekly jobless claims. According to Federal Reserve data, it appears that the weekly data series on initial jobless claims started in the 1960s.

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Chart of the Week

Visualizing the Countries Most Reliant on Tourism

With international travel grinding to a halt, here are the economies that have the most to lose from a lack of tourism.

Published

2 days ago

May 22, 2020

Dorothy Neufeld

Visualizing the Countries Most Reliant on Tourism

Without a steady influx of tourism revenue, many countries could face severe economic damage.

As the global travel and tourism industry stalls, the spillover effects to global employment are wide-reaching. A total of 330 million jobs are supported by this industry around the world, and it contributes 10%, or $8.9 trillion to global GDP each year.

Today’s infographic uses data from the World Travel & Tourism Council, and it highlights the countries that depend the most on the travel and tourism industry according to employment—quantifying the scale that the industry contributes to the health of the global economy.

Ground Control

Worldwide, 44 countries rely on the travel and tourism industry for more than 15% of their total share of employment. Unsurprisingly, many of the countries suffering the most economic damage are island nations.

At the same time, data reveals the extent to which certain larger nations rely on tourism. In New Zealand, for example, 479,000 jobs are generated by the travel and tourism industry, while in Cambodia tourism contributes to 2.4 million jobs.

Rank	Country	T&T Share of Jobs (2019)	T&T Jobs (2019)	Population
1	Antigua & Barbuda	91%	33,800	97,900
2	Aruba	84%	35,000	106,800
3	St. Lucia	78%	62,900	183,600
4	US Virgin Islands	69%	28,800	104,400
5	Macau	66%	253,700	649,300
6	Maldives	60%	155,600	540,500
7	St. Kitts & Nevis	59%	14,100	53,200
8	British Virgin Islands	54%	5,500	30,200
9	Bahamas	52%	103,900	393,200
10	Anguilla	51%	3,800	15,000
11	St. Vincent & the Grenadines	45%	19,900	110,900
12	Seychelles	44%	20,600	98,300
13	Grenada	43%	24,300	112,500
14	Former Netherlands Antilles	41%	25,700	26,200
15	Belize	39%	64,800	397,600
16	Cape Verde	39%	98,300	556,000
17	Dominica	39%	13,600	72,000
18	Vanuatu	36%	29,000	307,100
19	Barbados	33%	44,900	287,400
20	Cayman Islands	33%	12,300	65,700
21	Jamaica	33%	406,100	2,961,000
22	Montenegro	33%	66,900	628,100
23	Georgia	28%	488,200	3,989,000
24	Cambodia	26%	2,371,100	16,719,000
25	Fiji	26%	90,700	896,400
26	Croatia	25%	383,400	4,105,000
27	Philippines	24%	10,237,700	109,600,000
28	Sao Tome and Principe	23%	14,500	219,200
29	Bermuda	23%	7,800	62,300
30	Albania	22%	254,300	2,880,000
31	Iceland	22%	44,100	341,200
32	Greece	22%	846,200	10,420,000
33	Thailand	21%	8,054,600	69,800,000
34	Malta	21%	52,800	441,500
35	New Zealand	20%	479,400	4,822,000
36	Lebanon	19%	434,200	6,825,000
37	Mauritius	19%	104,200	1,272,000
38	Portugal	19%	902,400	10,197,000
39	Kiribati	18%	6,600	119,000
40	Gambia	18%	129,600	2,417,000
41	Jordan	18%	254,700	10,200,000
42	Dominican Republic	17%	810,800	10,848,000
43	Uruguay	16%	262,500	3,474,000
44	Namibia	15%	114,600	2,541,000

Croatia, another tourist hotspot, is hoping to reopen in time for peak season—the country generated tourism revenues of $13B in 2019. With a population of over 4 million, travel and tourism contributes to 25% of its workforce.

How the 20 Largest Economies Stack Up

Tourist-centric countries remain the hardest hit from global travel bans, but the world’s biggest economies are also feeling the impact.

In Spain, tourism ranks as the third highest contributor to its economy. If lockdowns remain in place until September, it is projected to lose $68 billion (€62 billion) in revenues.

Rank	Country	Travel and Tourism, Contribution to GDP
1	Mexico	15.5%
2	Spain	14.3%
3	Italy	13.0%
4	Turkey	11.3%
5	China	11.3%
6	Australia	10.8%
7	Saudi Arabia	9.5%
8	Germany	9.1%
9	United Kingdom	9.0%
10	U.S.	8.6%
11	France	8.5%
12	Brazil	7.7%
13	Switzerland	7.6%
14	Japan	7.0%
15	India	6.8%
16	Canada	6.3%
17	Netherlands	5.7%
18	Indonesia	5.7%
19	Russia	5.0%
20	South Korea	2.8%

On the other hand, South Korea is impacted the least: just 2.8% of its GDP is reliant on tourism.

Travel, Interrupted

Which countries earn the most from the travel and tourism industry in absolute dollar terms?

Topping the list was the U.S., with tourism contributing over $1.8 trillion to its economy, or 8.6% of its GDP in 2019. The U.S. remains a global epicenter for COVID-19 cases, and details remain unconfirmed if the country will reopen to visitors before summer.

Travel and tourism contribution to GDP in absolute terms

Meanwhile, the contribution of travel and tourism to China’s economy has more than doubled over the last decade, approaching $1.6 trillion. To help bolster economic activity, China and South Korea have eased restrictions by establishing a travel corridor.

As countries slowly reopen, other travel bubbles are beginning to make headway. For example, Estonia, Latvia, and Lithuania have eased travel restrictions by creating an established travel zone. Australia and New Zealand have a similar arrangement on the horizon. These travel bubbles allow citizens from each country to travel within a given zone.

Of course, COVID-19 will have a lasting impact on employment and global economic activity with inconceivable outcomes. When the dust finally settles, could global tourism face a reckoning?

Chart of the Week

Zoom is Now Worth More Than the World’s 7 Biggest Airlines

Zoom benefits from the COVID-19 virtual transition—but other industries aren’t as lucky. The app is now more valuable than the world’s seven largest airlines.

Published

1 week ago

May 15, 2020

Iman Ghosh

Zoom Is Now Worth More Than The 7 Biggest Airlines

Amid the COVID-19 pandemic, many people have transitioned to working—and socializing—from home. If these trends become the new normal, certain companies may be in for a big payoff.

Popular video conferencing company, Zoom Communications, is a prime example of an organization benefiting from this transition. Today’s graphic, inspired by Lennart Dobravsky at Lufthansa Innovation Hub, is a dramatic look at how much Zoom’s valuation has shot up during this unusual period in history.

The Zoom Boom, in Perspective

As of May 15, 2020, Zoom’s market capitalization has skyrocketed to $48.8 billion, despite posting revenues of only $623 million over the past year.

What separates Zoom from its competition, and what’s led to the app’s massive surge in mainstream business culture?

Industry analysts say that business users have been drawn to the app because of its easy-to-use interface and user experience, as well as the ability to support up to 100 participants at a time. The app has also blown up among educators for use in online learning, after CEO Eric Yuan took extra steps to ensure K-12 schools could use the platform for free.

Zoom meeting participants have skyrocketed in past months, going from 10 million in December 2019 to a whopping 300 million as of April 2020.

Zoom vs. Airlines stock chart

The Airline Decline

The airline industry has been on the opposite end of fortune, suffering an unprecedented plummet in demand as international restrictions have shuttered airports:

The world’s top airlines by revenue have fallen in total value by 62% since the end of January:

Airline	Market Cap Jan 31, 2020	Market Cap May 15, 2020
Southwest Airlines	$28.440B	$14.04B
Delta	$35.680B	$12.30B
United	$18.790B	$5.867B
International Airlines Group	$14.760B	$4.111B
Lufthansa	$7.460B	$3.873B
American	$11.490B	$3.886B
Air France	$4.681B	$2.137B
Total Market Cap	$121.301B	$46.214B

Source: YCharts. All market capitalizations listed as of May 15, 2020.

With countries scrambling to contain the spread of COVID-19, many airlines have cut travel capacity, laid off workers, and chopped executive pay to try and stay afloat.

If and when regular air travel will return remains a major question mark, and even patient investors such as Warren Buffett have pulled out from airline stocks.

Airline	% Change in Total Returns (Jan 31-May 15, 2020)
United	-72.91%
International Airlines Group	-72.16%
American	-65.76%
Delta	-65.39%
Air France	-54.34%
Southwest Airlines	-56.35%
Lufthansa	-48.08%

Source: YCharts, as of May 15, 2020.

The world has changed for the airlines. The future is much less clear to me about how the business will turn out.

—Warren Buffett

What Does the Future Hold?

Zoom’s recent success is a product of its circumstances, but will it last? That’s a question on the mind of many investors and pundits ahead of the company’s Q1 results to be released in June.

It hasn’t been all smooth-sailing for the company—a spate of “Zoom Bombing” incidents, where uninvited people hijacked meetings, brought the app’s security measures under scrutiny. However, the company remained resilient, swiftly providing support to combat the problem.

Meanwhile, as many parts of the world begin taking measures to restart economic activity, airlines could see a cautious return to the skies—although any such recovery will surely be a “slow, long ascent”.

Correction: Changed the graphics to reflect 300 million daily active “meeting participants” as opposed to daily active users.