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.
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.