Last week I reported on a Goldman Sachs estimate that new unemployment filings could increase 800 percent to more than 2 million. The reality was much worse. The sudden onset of the Coronavirus pandemic and associated stay-at-home advisories and orders led to a record-breaking unemployment report with 3.28 million Americans filing first-time unemployment claims over the past week.
It was expected that unemployment numbers would be bad, but the actual numbers were worse than expected. Yahoo Finance reported that economists had expected about 1.64 million new filings. What they got was double the forecast.
The 3.28 million new claims are the worst unemployment report in the history of the statistic which dates back to 1967. By comparison, the largest single increase in claims during the Great Recession was 665,000 in March 2009. The previous record was 695,000 in October 1982.
On Twitter yesterday, the president attacked the “LameStream [sic] Media” for “trying to get me to keep our Country closed as long as possible in the hope that it will be detrimental to my election success.” The president has repeatedly stated his hope that the country can be reopened by Easter, two weeks away, noting that workers are “not going to go walk around hugging and kissing each other in the office when they come back, even though they may feel like it.”
But medical experts, including White House advisor Dr. Anthony Fauci, say that may be unlikely and that lifting restrictions too quickly could be disastrous.
“You may not want to essentially treat it as just one force for the entire country, but look at flexibility in different areas,” Fauci said earlier this week. “So I think people might get the misinterpretation you’re just going to lift everything up. … That’s not going to happen. It’s going to be looking at the data. And what we don’t have right now that we really do need, is we need to know what’s going on in those areas of the country where there isn’t an obvious outbreak.”
The Coronavirus relief bill that passed the Senate earlier today, includes an extension in unemployment insurance for the millions of out-of-work Americans. The bill, which now goes to the House, provides for $600 per week for four weeks in addition to normal state unemployment benefits.
The impact of the staggering new numbers of unemployed workers on the election is uncertain at this point. Many will return to work long before the polls open in November, but rolling quarantines and the fallout from the current shutdown will be with us for months. Even if restrictions were lifted immediately, many people would be hesitant to go back into restaurants and stores or to get back onto airliners and cruise ships.
There are a few bright spots in the economy, however. Grocery stores, delivery restaurants, package delivery services, and Amazon are among the businesses that are still hiring. The downside is that many of the people filling these jobs have lost higher-paying positions.
While presidents historically have problems getting re-elected in times of economic distress, Americans realize that it was the Coronavirus and not President Trump that caused the current crisis. It seems likely that the election may become a referendum on President Trump’s handling of both the pandemic and the probable recession that results from it. That track record is still being compiled.