“The decline has been sharp, which raises the possibility that we reached the bottom quickly.”
The Labor Department reported this morning that another 3.2 million Americans filed unemployment claims last week.
On the plus side, the claims have dropped from its peak in March. That stat suggests layoffs might slow down.
From The Wall Street Journal:
Weekly jobless claims—though still numbering in the millions, well above the prior weekly record of 695,000, set in 1982—suggest the wave of unemployment caused by the pandemic could crest as soon as this month. Still, the layoffs that already occurred are likely to cause the unemployment rate, at a 50-year low as recently as February, to jump to a record high with April’s number, due out Friday. The figures go back to 1948.
“The decline has been sharp, which raises the possibility that we reached the bottom quickly,” Michael Moran, an economist at Daiwa Capital Markets, said. He said he expects the peak of unemployment triggered by the pandemic to occur in April or May, noting that most nonessential businesses have already closed and there are signs the virus’s spread is easing in some areas. “Parts of the economy are already starting to reopen,” he said.
States have started opening their economies again, which means employers are hiring “employees back as they see some increase in demand.” It helps “that online retailers, delivery services and grocery stores have increased hiring, and others are placing workers back on payrolls to qualify for loan forgiveness from the government.”
Famous Dave’s is reopening in Oklahoma and Texas. Chief Executive Jeff Crivello said that “he expects most workers to return, even those whose unemployment benefits exceed their forgone [sic] wages.”
Chief Executive of Anderson Economic Group Patrick L. Anderson remains cautious about the economy:
“We have some uncharted territory coming up in May and June, where employers are going to start insisting that workers come back and some won’t come back,” he said, since some workers would prefer to collect unemployment benefits and limit their risk of illness by staying home.
He said another challenge for Michigan is the role of the auto industry, which employs about one in 25 workers in the state. Restarting auto manufacturing will require coordination across supply chains that span states, Canada and Mexico. “You need not one plant but 10 plants to open up in order for industry to regain its footing,” he said.
[Featured image via YouTube]DONATE
Donations tax deductible
to the full extent allowed by law.