I’m finding it hard to wrap my head around exactly how bad the economy is and how fast the collapse has been.
Today’s report of 6.65 million new claims for unemployment for the week ended March 28 exploded through the record number of new claims set just the prior week at 3.31 million. (The initial 3.28 million number was revised upward.)
In March, through March 28, more than 10 million Americans lost their jobs and applied–successfully through crashing web sites and overwhelmed state employment offices–for unemployment benefits. The actual number of job losses is even higher since gig workers and some of the self-employed who are now eligible for unemployment benefits under the recently passed coronavirus rescue package have been told that they can’t apply until sometime after March 28. (There’s also the confusion caused by the difference between being fired and furloughed. In both cases a worker loses a job, but furloughed workers keep their benefits including health insurance. Furloughed workers are also eligible for unemployment but many don’t immediately realize that they can file. Those workers are still in the unemployment pipeline.)
In the last two weeks the coronavirus recession has erased nearly all the job gains of the past five years. The 10 million combined initial claims in the last two weeks equals the total new claims in the first 6.5  months of the 2007-2009 recession. Just more confirmation of the extraordinary speed of the economy as a result of the coronavirus shutdowns.
We won’t get a new official unemployment rate until tomorrow when the government issues the March jobs report. The unemployment rate will certainly rise from February’s 3.5% rate. For some context, the highest unemployment rate in the Great Recession was–briefly–10%. But Friday’s numbers will certainly understate the current damage since it is based on a survey that was completed in the first half of March. Economists a Bloomberg project that if we get weekly initial claims in the neighborhood of 3 to 5 million for several more weeks, the employment rate will climb toward 15% in April.
Think we might get yet another bounce if investors and traders misunderstand the data?
