Economy

Jobless Claims Climb to 30 Million

JM Ashby
Written by JM Ashby

Fewer Americans filed for unemployment in the last week than did during the previous week, but only slightly.

According to the Bureau of Labor Statistics (BLS), at least 3.8 million additional Americans filed in the last week bringing the total number of jobs lost during the pandemic to at least 30 million.

Pinning down the true level of unemployment isn’t easy, but senior economist Sal Guatieri of BMO Capital Markets points out that about 19% of the pre-crisis labor force has applied for benefits.

Last week, the states of Florida, Georgia, California, Texas and New York reported the biggest increases in new claims, according to the Labor Department. [...]

“Claims may continue to fall over coming weeks but will likely remain high as businesses remain closed and have no choice but to continue to reduce or furlough their workforce,” said Rubeela Farooqi, Chief U.S. economist at High Frequency Economics.

These numbers do not include a significant number of people who either don't qualify for benefits or simply haven't had their claims processed yet so we can say with some level of certainty that the true number is higher.

With that said, what concerns me the most and what should concern everyone is the fact that consumer demand will remain low for a long time to come. Combined with the possibility that we'll see another outbreak, millions of people will be out of a job for months to come. The Congressional Budget Office estimates that unemployment will average at least 10 percent through 2021, but some economists believe it could remain as high as 13 percent through the next year.

I don't want to sound like a broken record, but things did not have to be this bad. The numbers are this bad because of Trump and things could get worse if we recklessly cause another outbreak by reopening too soon or too widely. Trump's refusal to act when the virus was first detected in the United States allowed it to spread and necessitated stay-at-home orders that killed 30 million jobs and counting.

I don't know if Congress still has the will to do anything, but I think it's going to become quite obvious that one-time virus checks did not cut it.

  • muselet

    The Let’s Kill More People Brigade will jump on this news and insist the US need to open up the economy! (Jim Jordan already did, on Twitter and FNC, what a surprise).

    The problem is, as LGM’s Scott Lemieux reminds us, just because businesses are open doesn’t mean they’ll have customers.

    The economy would have gone into recession because of the pandemic regardless of the speed and appropriateness of governmental response. Right now, the big question is how deep and long the recession will be and whether it tip over into depression.

    The only way I can see to keep the global economy from imploding is for the federal government (and national governments everywhere) to deficit spend.

    There will be a second wave of Covid-19. There will probably be a third wave, and there might be a fourth. Not being rash about lifting restrictions will be economically painful, not to mention bloody boring, but it will also mean the entire economy doesn’t shut down repeatedly over the next year or two.

    Will Congress do the right thing? Stay tuned.

    Gee, this is a cheerful comment, isn’t it?

    –alopecia

    • JMAshby

      Yeah, I mean, you can say restaurants are allowed to open, but how many can survive running at even 50 percent capacity much less 35 to 20 percent on a semi-permanent basis?

      To put it another way — a restaurant chain that was operating at half capacity would have gone out of business even when the economy was good.

      Even when my favorite place reopens (if it does) I can’t say I’ll feel good about going there.

      • muselet

        People will resume normal—whatever that word means—life when they feel safe doing so, not when a deluded governor declares they can/should/must.

        –alopecia

        • Tony Lavely

          I hope and pray you could substitute either president or faux news flunky in that statement and still have it correct.
          However… See news about Michigan.

      • Draxiar

        To your point, my wife and I have a small business (very small- just her an I and our daughter when she’s in the mood). We rely on festivals, trade shows, craft shows, and we even have a mall kiosk during the holidays for the bulk of our income. Our website orders have been reliable but not sustaining. All of our major spring shows have been cancelled and we do not know what will happen with our summer shows and beyond. Even if they were able to proceed people are going to be tight on money and many will still be skeptical of attending- including us. Bottom line, people are rightfully spooked and it will take time and a ton of patience for them to be confident in returning to “normal” (for whatever that means now).