Diesel in California is close to hitting $8 a gallon, which is bad news for restaurants, hotels, and small businesses that could face a COVID-style collapse in spending.

• Diesel prices in high-cost states like California are weeks away from $8 a gallon.
• Once diesel gets that expensive, restaurants and hotels are expected to start laying people off fast.
• Independent restaurants are already under heavy stress because they lack the financial backing of big chains.
• The latest jobs report looked better than reality because of seasonal school hiring, so the economy is weaker than the headlines suggest.
• Small businesses are likely to close in large numbers while big companies scoop up their customers.

Outlook: Expect layoffs and closures in hospitality to accelerate in the coming weeks if diesel keeps climbing.