The latest report from the Labor Department released this morning showed that at least 2831,000 Americans filed for unemployment last week, which is a lot, but those number predate a significant number of cancellations, lockdowns and closures.
Economists at the world's second largest investment bank, Goldman Sachs, released a note this morning predicting that up to 2.25 million Americans will have filed for unemployment just this week alone. And that would be an all-record in such a short period of time.
They predict the report will show 2.25 million Americans filed for their first week of unemployment benefits this week — eight times the number of people who filed last week and the highest level on record.
That estimate is based on news reports of an unprecedented surge in layoffs early in the week. Airlines, restaurants, hotels, sports events and retailers are all struggling to cope with a sudden drop in revenue, as people stay home to prevent the spread of the virus. [...]
The Goldman Sachs economists noted that although it's possible unemployment claims slowed down later in the week, even a conservative estimate suggests more than 1 million people filed initial jobless claims this week — more than the highest level on record of 695,000 in the week ending October 2, 1982.
So, even if the numbers are less than half as bad as they're predicting, it would still be a all-time record.
It would be understandable if you're a little skeptical of Goldman's economists, but there's more news that makes me inclined to believe that they may be right.
Trump's Labor Department is asking states not to report their own numbers this week because it may spook Wall Street.
The email on Wednesday asked state labor authorities to only “provide information using generalities to describe claims levels (very high, large increase)” until the Labor Department releases the total number of national claims next Thursday.
“States should not provide numeric values to the public,” Gay Gilbert, the administrator of the department’s Office of Employment Insurance, wrote in the email shared with the Times. The message noted that the figures are closely tracked by financial markets judging the strength of the economy.
There appears to be some sense that things will just go back to normal in a few months and the economy will somehow miraculously grow at a rate of 3 to 4 percent in the third and fourth quarters of the year, but that's incredibly difficult if not impossible for me to imagine. I'm physically straining to think of it.
There are going to be so many businesses that never come back. The major companies can leverage themselves for the next decade and possibly even count on a bailout, but there will be countless small business that will never reopen. Things will never go back to normal for them. And millions of Americans are going to be applying for the jobs that are left when this is over.
I'm not an economist, but the idea that the economy will grow by 4 percent again at any point in the next year or two feels like fantasy to me. Household debt is about to explode and the next president is going to come into office with a $2 trillion deficit.
This is another topic for another day, but if you were expecting a Democratic president to come into office and immediately pass a sweeping domestic spending agenda, you can kiss that goodbye. I would have said that was unlikely in any case even if the next president were Bernie Sanders himself, but it's especially unlikely now. Once again, a Democrat will have to put the country back together again after it's ripped apart by a Republican.