* AP…
Nearly 3.3 million Americans applied for unemployment benefits last week — nearly five times the previous record set in 1982 — amid a widespread economic shutdown caused by the coronavirus.
The surge in weekly applications was a stunning reflection of the damage the viral outbreak is inflicting on the economy. Filings for unemployment aid generally reflect the pace of layoffs.
Layoffs are sure to accelerate as the U.S. economy sinks into a recession. Revenue has collapsed at restaurants, hotels, movie theaters, gyms, and airlines. Auto sales are plummeting, and car makers have closed factories. Most such employers face loan payments and other fixed costs, so they’re cutting jobs to save money.
As job losses mount, some economists say the nation’s unemployment rate could approach 13% by May. By comparison, the highest jobless rate during the Great Recession, which ended in 2009, was 10%.
- Stones - Thursday, Mar 26, 20 @ 10:29 am:
Our daughter was laid off yesterday. This is affecting every segment of the economy. The sad thing is that once this virus peaks I cannot see people rushing back into restaurants, hotels, airplanes, etc. At least not until they develop a vaccine and get it out to the public.
- Paddyrollingstone - Thursday, Mar 26, 20 @ 10:35 am:
Stones, my sympathies.
I keep thinking, though, that this recession will be unlike previous ones because those were about a glaring weakness in the economy and the correction needed to fix it. This recession is obviously not caused by a weakness in the economy. Is my thinking incorrect?
Btw, Rich - thanks so much for your website. In times like this, it is a fantastic place for all the info you provide.
- SSL - Thursday, Mar 26, 20 @ 11:00 am:
Not only won’t people rush back into restaurants, there will be some restaurants and retail stores that never come back. And the people they employed won’t have jobs. There won’t be a snap back to previous economic strength. Too many businesses were highly leveraged, and the stimulus package, while a good idea, won’t address most of them. As credit quality decreases and bankruptcies increase, the impact on the economy won’t be pretty.