I guess Wall Street is happy Liz and Bernie are out but that doesn’t change the fundamentals a bit.
6.6 million Americans filed for unemployment last week, bringing the pandemic total to over 17 million
By Heather Long and Andrew Van Dam, Washington Post
April 9, 2020
The surge of job losses continued last week with 6.6 million Americans applying for unemployment benefits, the Labor Department said Thursday.
More than 17 million new jobless claims have been filed in the past four weeks, a rapid and unprecedented escalation in unemployment in the United States since the week President Trump declared a national emergency because of the novel coronavirus.
The 17 million figure includes new reporting from the Labor Department that even more people filed for unemployment in the prior week, pushing the jobless claims up during the week ending March 28 to a record 6.9 million, up from 6.6 million.
Top government and health officials have ordered sweeping closures of businesses in an effort to fight the deadly coronavirus by keeping workers and customers at home, but the side effect has been a massive rise in unemployment. Janet L. Yellen, one of the world’s top economists, said the U.S. unemployment rate has jumped to at least 12 or 13 percent already, the worst level of joblessness the nation has seen since the Great Depression.
“It looks like the unemployment rate is headed to 15 percent,” said Chris Rupkey, chief financial economist at MUFG Bank, in a note to clients. “This isn’t a recession, it’s the Great Depression II.”
Relief has been slow to reach people losing their jobs as states have been overwhelmed with claims. The Washington Post spoke with more than a dozen workers across the country who lost their jobs. The majority have not received money yet.
As tens of thousands of businesses closed because of shelter in place orders in more than 40 states, the hospitality sector — hotels, restaurants and amusement parks — weathered the steepest losses. For the week that ended March 28, California reported 872,000 workers from service industries filed for unemployment.
Now, nearly every sector of the economy is shedding workers, including manufacturing, construction and even health-care facilities outside of hospitals. In Texas, which reported 121,000 newly unemployed for the week ended March 28, jobs were lost in food services, manufacturing, mining, agriculture, forestry, health care, waste management, transportation and warehousing, among other sectors.
“Today’s report continues to reflect the purposeful sacrifice being made by America’s workers and their families to slow the spread of the coronavirus,” said Labor Secretary Eugene Scalia in a statement.
Well, I’m glad it was for a purpose. What was that exactly? Make a Billionaire some more money?
Treasury Secretary Steven Mnuchin also said it’s possible the nation could reopen for business in May.
The stock market surge came after the Federal Reserve unveiled over $2 trillion in new lending to businesses of all sizes, as well as struggling city and state governments. Fed Chair Jerome H. Powell said the nation’s top priority is fighting the pandemic and caring for the ill, but the central bank is doing whatever it takes to provide economic relief.
“The Fed’s role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible,” Powell said.
On top of the Fed’s historic actions, the federal government has been scrambling to get checks and loans into the hands of workers and companies to buoy employment and keep paychecks flowing, but job losses have continued to build, even after Congress passed a historic $2 trillion relief package. Businesses small and large are struggling to get loans. As companies run out of cash, they are cutting workers and telling them to file for unemployment benefits. But many states have been slow to distribute money.
As unemployment checks are slow to arrive, people are turning to whatever aid they can find. Modern day “bread lines” have started appearing in cities like Orlando, San Diego, Pittsburgh and Cleveland where thousands lined up for free food. The slow release of funds in the United States is a marked contrast from Denmark where the government is paying workers 75 percent of their salaries during the pandemic, and Canada, which vowed to get money to workers in 10 days or less.
“There were already hurdles to accessing unemployment benefits before the pandemic hit. Many states had done everything they could to reduce access to benefits. Well, now we are seeing the result,” said Michele Evermore, a senior policy analyst at the National Employment Law Project.
Economists say the millions of workers likely to file for unemployment in April will strain America’s safety net programs even more. They are urging companies to furlough workers instead of doing a full layoff. A furlough usually allows workers to keep their health insurance and return quickly when business resumes. But many companies have cut ties entirely, leaving workers with no income and bills piling up in the midst of a pandemic.
Unemployment benefits typically cover less than half a worker’s salary, but the $2 trillion relief package passed by Congress directed states to give an extra $600 a week to people out of work, including self-employed and gig workers. The Trump administration issued rules Sunday night for states to begin disbursing that extra money, but state officials say it will take time to process all the applications. Many states have not even set up a process yet to handle applications from self-employed workers like hairdressers and Lyft drivers.
“Understand that it takes approximately 25-30 minutes to file one claim,” tweeted Mike Ricci, spokesperson for Maryland Gov. Larry Hogan (R). He said staff were working round-the-clock, but there was only so much they could do given the state received more claims in March alone than all of 2019.
And this is the positive, governmment approved spin.
I call it a selling opportunity.