More than 6.6 million Americans applied for unemployment benefits last week, the Labor Department reported Thursday, doubling an all-time high set just the week before that as the U.S. economy continues to crash because of the coronavirus outbreak.
The Labor Department’s devastating unemployment report suggests the U.S. is headed for a deep recession, according to economists, with nearly 10 million Americans thrown out of work in the span of two weeks.
Economists had expected similar numbers to the 3.3 million unemployment claims reported last week, or maybe a modest increase.
Instead, they got a shocking tsunami of jobless claims — 6,648,000 in total — as entire U.S. industries shut down and small businesses close up shop amid the worsening pandemic.
The news was particularly grim in hard-hit New York, with 366,000 workers filing unemployment claims last week — up 350% since the week before. California’s claims also skyrocketed to nearly 900,000, up from 186,000 the week before.
President Trump did not immediately comment on the economic carnage.
He did, however, boast about his chats with Saudi Crown Prince Mohammed bin Salman and Russia’s Vladimir Putin. He claimed the two oil producers have agreed to ease their squabble that sparked a disastrous price plunge in oil.
“Will be great for the oil and gas industry!” Trump gushed on Twitter without mentioning the devastating job losses.
Democratic presidential front-runner Joe Biden blamed Trump for failing to respond early to the pandemic and blasted Treasury Secretary Steven Mnuchin for saying last week that the massive job losses were “not relevant.”
“Try telling that to any one of the millions of Americans who are now out of work because of this crisis,” Biden said in a statement.
The U.S. economy has to suffer two consecutive quarters of negative gross domestic product growth to enter a recession. Moreover, the National Bureau of Economic Research is widely considered the only entity that can officially declare one.
Still, experts began floating the R-word in light of Thursday’s catastrophic unemployment figures.
Lawrence White, a longtime economics professor at New York University’s Stern School of Business, said the new numbers don’t even stack up well against the Great Depression of the 1930s.
“In the 1930s, we went from full employment in 1929 to 25% unemployment in 1933. It took three and a half years. We’re going to be seeing a comparable descent from full employment to deep depression in three and a half weeks, by this rate,” White told the Daily News.
White added, “This type of sharp descent into economic depression has never been experienced on a national scale before.”
The unemployment tidal wave has spread unexpectedly quickly from restaurants, travel and hospitality industries to virtually every corner of the U.S. economy.
This week’s claims are 10 times the previous all-time high at the height of the Great Recession of 2009, offering a sign of just how massive the economic dislocation has spread across the nation.
“This is comparable to what we saw during the Great Recession over the course of six months, but this all happened in two weeks,” said Olugbenga Ajilora, a senior economist at the liberal-leaning Center for American Progress.
The dire report is sure to raise pressure on Trump and Congress to push ahead with a second mammoth corona-virus stimulus package.
GOP brass, including Senate Majority Leader Mitch McConnell (R-Ky.), has resisted discussing a new plan, pushing a wait-and-see approach after a $2.2 trillion stimulus package passed just last week.
The first package dramatically improved unemployment benefits for the millions who have been furloughed or fired, including extending benefits and boosting weekly payments by $600.
But more relief is likely going to be needed to stave off economic calamity, including more direct aid for businesses, according to White.
“You’ve seen the stories of the 1930s, the poverty, the hardships. Let’s hope we can avoid that,” the NYU professor said.
Travel has all but screeched to a halt as officials order Americans to stay at home to fight the spread of the global pandemic that has already killed nearly 5,000 people in the U.S.
Thursday’s awful unemployment report may also pile pressure on Trump to agree to allow for a special sign-up period for Obamacare as millions of Americans lose their private health insurance along with their jobs.
Vice President Mike Pence won widespread ridicule for refusing to answer a question about Obamacare enrollment during a White House coronavirus briefing Wednesday.
Looking ahead, Ajilora said a recession may at this point be “necessary,” considering COVID-19 could kill as many as 240,000 Americans, according to the White House’s own projections.
“It has become necessary because we didn’t tackle the public health crisis aggressively from the start,” Ajilora said. “If we had nipped this in the bud, we may not have had to implement these extreme social distancing measures that is causing this. But now the horse has left the barn.”
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