Eight-week Coronavirus unemployment total: 36.5 million (and that’s just those who can apply for benefits)
As expected, the Department of Labor Thursday announced another tsunami of new claims for unemployment insurance benefits, a seasonally adjusted 2.98 million of them in the week ending May 9. That is slightly less than the previous week’s tally. But since coronavirus-related layoffs began in the second week of March, 36.5 million people have made new benefit claims.
Those numbers don’t include everyone who has lost a job. For instance, in the monthly jobs report released last Friday, the Bureau of Labor Statistics said that 6.43 million workers had left the labor force in April. While the size of the labor force changes month to month, the gain or loss is rarely more than 100,000. This indicates the April number was greatly inflated by the BLS’s definition of who is and isn’t in the labor force. Anybody out of work who hasn’t looked for a job in the past four weeks is automatically excluded. Given the strictures of the economic lockdown, it’s almost certain that millions of those people counted as having left the labor force haven’t really done so. They just found it impossible to look for work. Even granting that a couple of those millions may never again have a job, the total number of Americans out of work would seem to be at least 40 million. If so, that means an unemployment rate of 25%. The BLS has retroactively calculated the worst jobless rate during the Great Depression at 24.9% in 1933.
James Bullard, president of the St. Louis Federal Reserve, said two months ago that unemployment could reach 30% in the second quarter that ends June 30. Goldman Sachs, which had previously projected 15% unemployment for the second quarter, changed its tune Tuesday, boosting that to 25%. It also said gross domestic product for the quarter would fall 39%.
But, just like other analysts, Goldman’s predictions are entangled in caveats and mixed messages. On the one hand, it said “the U.S. economy now appears to be through the trough” of the current downturn, meaning economic activity has bottomed. The third and fourth quarter, Goldman said, will see big percentage increases in GDP from the second quarter low point, and for the whole year will come in at -6.5%. The bank gave credit for keeping the pandemic recession from getting worse to relief legislation passed by Congress.
At the same time, however, the bank said there are many risks beyond widespread viral infection from a reopening of the economy, including the risk that “prolonged economic weakness could cause severe scarring effects such as permanent layoffs and business closures that delay the recovery.”
Heidi Shierholz at the Economic Policy Institute notes: “Many of the jobs that have been lost in this recession are low-wage service, retail sales, and office jobs. Because of things like occupational segregation, discrimination, and other labor market disparities, women and black and Hispanic workers are more concentrated in these jobs and as a result are facing greater job loss.”
While Democrats in the House of Representatives are pushing a new package of relief legislation to ease the pain—$3 trillion worth—even that won’t be enough, she said. Both Senate Majority Leader Mitch McConnell and Donald Trump have called that legislation “dead on arrival” in the Senate. The perfect Republican tone for the middle of a deadly pandemic.
- Fed Chair Powell says without more stimulus, economy won’t recover (but Trump and McConnell “Just Say NO”)
(Crossposted with DailyKos.)