Unemployment Filings Exceeded 3 Million Last Week

Figure 1 below is part of SMU’s recession monitor and provides a visual reference for the incredible jump in U.S. unemployment.

“Most historical comparisons of this scale are inadequate. The closest would be natural disasters like major hurricanes,” said Glassdoor senior economist Daniel Zhao in comments to CNN. “However, as today’s report shows, the coronavirus outbreak is economically akin to a major hurricane occurring in every state around the country for weeks on end.”

State labor departments have been overwhelmed by the number of requests for unemployment benefits, requiring additional staff and, in some cases, expanded server capacity. Next week’s unemployment numbers are expected to be similar.

“We estimate that by summer, 14 million workers will have lost their jobs due to the coronavirus shock,” said Heidi Shierholz, economist at the Economic Policy Institute.

Treasury Secretary Steven Mnuchin called the record breaking numbers a “short term” issue to be resolved by the $2 trillion stimulus bill in Congress along with Federal Reserve stimulus. “To be honest with you, I think these numbers right now aren’t relevant,” Mnuchin told CNBC.

“Obviously, there are people who have jobless claims,” Mnuchin said. “And the good thing about the bill is the president is protecting those people. So, now with these plans, small businesses hopefully will be able to hire back a lot of those people. Last week, they didn’t know if they had protections. They didn’t have any cash. They had no choice. Now with this bill passed by Congress, there are protections.”

Federal Reserve Chairman Jerome Powell said the economy is in a “unique situation.”

“People need to understand, this is not a typical downturn,” Powell said Thursday on NBC’s “TODAY.”

“At a certain point, we will get the spread of the virus under control. At that time, confidence will return, businesses will open again, people will come back to work,” he added. “So you may well see a significant rise in unemployment, a significant decline in economic activity. But there can also be a good rebound on the other side of that.”