Yet another week of the rampaging pandemic and approximately another 3.2 million additional applications were filed with state unemployment agencies throughout the country. That brings the total number of the unemployment claims filed to a little more than 33 million people in just the past six or seven weeks. If you add that to the over 6.5 million that applied for unemployment benefits the prior six to seven weeks since March, that brings the number north of 39 million total Americans out of work. That translates to an effective unemployment rate of roughly 24%. (GULP)
So, in slightly less than two months’ time the unemployment rate has hit a level not seen since the Great Depression. To look at it another way, the number of jobs lost from March through this first week of May is more than the jobs added after the Global Financial Crisis.
These numbers will most likely be adjusted as the true unemployment figures cannot accurately be calculated. Since the tools used to measure the unemployment figures are based on actual unemployment benefit filings, this does not take into account those who simply cannot file. That makes up certain business owners, those sick with COVID-19 and others who are now forced to take care of children who are not in school currently. There is also the lag in filing a claim. Several economic groups have reported that since the close down of our economy occurred that there are approximately 40 unemployed citizens who attempted to file but could not get the filing done, for every 100 citizens that were successful. Unemployment computer systems have been overloaded as well as there is a lack of staff to take phone calls from individuals if they could not file online. So, this will contribute to higher real numbers when all is said and done.
Even though there has been a loosening of restrictions in some states, consumers are yet to venture out into stores and restaurants. People are also cutting back spending due to their own economic situations which will further damage a fragile economy. Those who have been laid off and/or furloughed may be rehired, but the timing is the key issue.
States themselves are grappling with the issue of diminished tax revenue and massive budget deficits. Some may be forced to reduce work forces as there is no end in sight for many state budget issues, as the reopening of economies will be a staggered level by level turn on, over the next several weeks and months.
The number of layoffs will most likely reduce as time goes on and the economy reopens. What will become of those laid off is the key question and what kind of job market are they returning to? Will those furloughed be fortunate enough to be rehired? Will businesses come back as strong as they were? We will explore these and other questions in our new series ……………. These Economic Times : The Great Pandemic of 2020.
Stay tuned. Stay safe.