An additional 1.3 million Americans filed new, initial claims for unemployment last week according to the Labor Department, and while that was down slightly from the 1.4 million claims in the previous week, the hole we're in is getting deeper.
If you include "gig economy" workers supported by the federal government's expanded unemployment program, the number climbed significantly higher to 2.3 million.
All told, the total number of people Americans on unemployment has ticked upward according to the latest figures, not down.
Economists polled by Reuters had forecast 1.375 million applications in the latest week. Claims peaked at a historic 6.867 million in late March. They have been gradually falling, though they remain roughly double their highest point during the 2007-09 Great Recession. Including a program funded by the government, 2.3 million people filed claims last week. [...]
There were 32.9 million people receiving unemployment checks under all programs in the third week of June, up 1.411 million from the middle of the month. The report, the most timely data on the economy’s health, could set the labor market for a pullback in employment growth in July.
The climbing number of American receiving unemployment partially fueled by gig economy workers losing their jobs may suggest another drop in consumer spending and demand has arrived.
If that's the case, we already know why it's happening; it's happening because our coronavirus outbreak is now bigger than it's ever been with new records being set almost every day.
As I write this, Arizona just reported that their positive test rate in the past 24 hours climbed to almost 35 percent. Arizona (75) and Florida (120) both reported a record number of COVID deaths this morning. Deaths are catching up to infections that initially spread last month.
The economy cannot really recover until we have controlled the virus and that should be plainly obvious to everyone by now, not just the economists who've been saying as much for the past several months.
The more than 32 million Americans receiving unemployment right now could see their weekly income drop by $600 if congressional Republicans refuse to extend the pandemic support program within the next three weeks. And if that happens, you can infer what it will mean for consumer spending which will fall off (or get pushed off) a second cliff.
I'm getting concerned that failure to control the virus combined with Republican refusal to pass adequate stimulus measures is going to result in something worse than what we've already seen. To say we could see an actual depression feels too dramatic, but we're playing with fire.