Coronavirus Economy

Jobless Claims Blow Away Previous Record

JM Ashby
Written by JM Ashby

Analysts predicted that up to three million Americans would file for unemployment last week, but the number of jobless claims soared above expectations and there's reason to believe the true number is actually far higher.

From Reuters:

The number of Americans filing claims for unemployment benefits last week soared to a record of nearly 3.28 million, the Labor Department reported, nearly five times the previous weekly record of 695,000 during the 1982 recession.

The report may understate the problem as the official statistics typically have not included the self-employed or independent contractors. Federal Reserve Chair Jerome Powell said the United States already “may well be in recession.”

In the modern gig economy where many people are employed as "contractors" rather than full employees, leaving them out of a report like this means we don't actually know how bad the damage is right now. With that said, 3.28 million claims in one week is obviously bad enough.

There seems to be a wide expectation that things will just return to normal in a few months and the economy will return to brisk growth in the third quarter of the year, but I can't be the only one who finds that very difficult to imagine.

Many people may be able to return to their jobs, but there will also be many who can't because their place of business no longer exists. Congress is about to send a $2 trillion rescue package to the White House for a signature and that will help, but thousands of small businesses that won't receive a bailout will never reopen.

The economy was only expected to grow anywhere from 1 to 1.5 percent this year before the pandemic. The pandemic would have took an axe to even the best economy, but it's not as if everything was great before under Trump's trade war which is still ongoing even now.

  • muselet

    Yes, I know, I probably rely too much on Kevin Drum’s analyses, but he’s too sensible not to pay attention to.

    Yesterday, he wondered, What Do We Call a Deliberately Engineered Recession?:

    Is it really a recession if it’s caused by the government stepping in and literally ordering businesses to reduce their output? Technically, I suppose so. GDP goes down, employment goes down, and consumption goes down. Those are all the markers of a recession.

    And yet . . . help me out here. It’s not the same thing, is it? Or am I missing something?

    This morning, he said, with regard to the 3+ million new unemployment claims:

    I hope we don’t all go crazy over this. After all, we basically ordered 3 million people to stop working, so it’s hardly a surprise that 3 million people filed claims for unemployment compensation. I’ll bet next week is going to be pretty high too.

    Of course, we also have wealthy clowns like Tom Golisano, who figures revving the economy back up is more important than, quoting, “losing a few more people.” Let’s all pause for a moment and let that sink in.

    Overwhelm the healthcare system and kill more people without improving the economy at all, or let rich people live out their Hunger Games fantasies? One guess which choice Donald Trump will make.

    –alopecia

  • katanahamon

    Problem is, we don’t know what’s in this stupid bill. The corporations once again will reap the biggest benefits, and the people will lose. Now we are hearing info trickle out, and it’s not good. I don’t understand why reporters aren’t fighting back when Rump says to their faces “you print fake news.” Directly to them. This is dangerous, it’s false, it’s beyond disrespectful, it’s hostile, it’s behavior unbecoming of..well, anyone. The lies..the lies..why can’t we impeach him for the lies???

  • gescove

    But the benefits of the tax cuts in the Tax Cuts and Jobs Act are sure to kick in soon! You know, that rocket fuel for the economy resulting in such high and fast growth that the cuts would pay for themselves?