Claims for unemployment benefits reached an all-time high of 3.3 million last week amid emergency measures designed to slow the spread of COVID-19, marking the end of a record streak of 113 months of employment growth.
US Treasury Secretary Steven Mnuchin predicts unemployment will rise as high as 20% (from its current 3.5%).
“With partial lockdowns across the country leading to a sudden stop in economic activity, the US economy will experience the largest economic contraction on record with the most severe surge in unemployment ever,” predicts Gregory Daco, Chief US Economist at Oxford Economics in New York. “We expect jobless claims will continue to climb as more economic activity shuts down.”
“This morning’s jobless claims confirm that the United States is in the thralls of a catastrophic unemployment crisis, the likes of which we haven’t seen since the Great Depression,” adds Andrew Stettner, senior fellow at the Century Foundation think tank. “This represents the single worst one-day piece of labor market news in America’s history.”
As COVID-19 continues to spread, tensions are rising between those who insist we must stay home from work to halt the spread of the virus and those who argue the country needs to reopen to prevent a recession.
“We can’t have the cure be worse than the problem,” said Trump on Monday, suggesting that continued closures could result in more harm than the pandemic itself.
“[It’s time] to start thinking about what kind of dramatic costs to society are we absorbing from the shutdown,” said former Trump economic adviser Stephen Moore, including widespread unemployment, spikes in drug overdoses, and suicides.
Opponents insist the outcome will be even worse if the virus continues to spread.
“If you don’t flatten the curve and minimize those who are getting infected, the amount of sickness will cripple business,” argues John Auerbach, president of the nonpartisan Trust for America’s Health.
“There is no functioning economy unless we control the virus,” warned Senator Lindsey Graham (R-SC) on Twitter. “Try running an economy with major hospitals overflowing, doctors and nurses forced to stop treating some because they can’t help all, and every moment of gut-wrenching medical chaos being played out in our living rooms, on TV, on social media, and shown all around the world.”
To date, the United States leads the world in coronavirus cases with more than 81,000 cases and roughly 1,000 deaths.