The second major indicator of the economic impact from the Coronavirus driven extreme social distancing was released Thursday morning. The Department of Labor, which publishes weekly unemployment claims, reported there were 3,280,000 unemployment claims during the week ending on March 21st.
A major economic recession was all but obvious when the Trump administration in unison with most states encouraged, and in some cases mandated, stay-at-home orders for non-essential employees, essentially shutting down large swaths of the economy.
According to CNBC, “the number shatters the Great Recession peak of 665,000 in March 2009 and the all-time mark of 695,000 in October 1982.” The effects of the Coronavirus shutdown is hitting the U.S. economy like a freight train; “the previous week, which reflected the period before the worst of the coronavirus hit, was 282,000, which was higher than expected at the time.”
The stock market was the first to face the reaper with major stock indexes dropping by more than 1/3 over the course of 6-weeks.
Despite the shocking report, the Dow Jones shot up by 6.38% today, indicating the sudden and widespread layoffs was expected. The general prediction across Wall Street was 1.5 million jobless claim, but this week’s relatively strong, but volatile, market bounceback may indicate traders do not expect the situation to get much worse.
The $2 trillion stimulus package passed by the Senate earlier today will be a much needed lifeline to the millions of people suddenly without jobs due to existential circumstances.
All this raises the very real question of whether destroying the economy and putting millions of people out of work will actually slow the spread and flatten the curve.