Life as we know it in the U.S. continues to lurch to a standstill. Most of the country is now seeking shelter from the coronavirus at home, as 38 states have already ordered shelter-in-place measures for citizens to prevent further spread of the virus. As we all know by now, that means the closures of bars and restaurants, salons, gyms, shops and other local businesses.
Economists weren’t shocked, then, to see record-high numbers of citizens applying for unemployment benefits two weeks ago — a seasonally adjusted 3.1 million. But now the number has more than doubled to a staggering 6.6 million Americans who filed for unemployment just last week, which brings the two-week total to nearly 10 million.
“I never thought I’d see such a print in my lifetime as an economist,” Thomas Costerg at Pictet Wealth Management told Bloomberg. Costerg had the highest forecast in a recent Bloomberg survey of economists at 6.5 million. They project that claims will stay elevated as more states announce stay-at-home orders, and it would be “not unthinkable” to see a 20 percent unemployment rate, more than double the high that followed the last recession.
walk through later, you could inhale the virus,” Fineberg told CNN. “But if you’re outside, the breeze will likely disperse it.
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Another recent report by Bank of America outlines a similarly grim economic forecast with projections of between 16 and 20 million job losses. These numbers could send the unemployment rate from 3.5 percent in February to 15.6 percent within mere months, which would by far outstrip the unemployment rate during the 2007-09 recession.
“We are officially declaring that the economy has fallen into a recession...joining the rest of the world, and it is a deep plunge,” Bank of America U.S. economist Michelle Meyer wrote in a note, as reported by The New York Times. “Jobs will be lost, wealth will be destroyed and confidence depressed.”
The record-shattering numbers also do not paint a full picture, either, as some states such as New York, New Jersey and California underreported the number of initial jobless claims, and people who left the workforce voluntarily for any reason aren’t counted either — such as those caring for a sick family member, having a child home from school, or leaving because they are sick themselves from coronavirus.
The number also doesn't capture self-employed workers, who were not eligible for state unemployment benefits until one day before the reporting period ended. A new temporary program was signed into law allowing gig workers eligibility to apply to state unemployment offices for up to 39 weeks’ unemployment benefits that will be funded entirely by the federal government.
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