Jobless numbers have hit records in the past 2 weeks, and this Thursday’s report does not aim to disappoint if that’s the type of statistic you’re into. 3.5 million unemployment applications were filed the week of March 28, up from 3.28 million the previous week.
Needless to say, this COVID-19 pandemic has not only created a very difficult situation for people’s healths across the world, but is also slowly crippling their economies.
Economist Lewis Alexander wrote a note to his clients expressing how unprecedented the current situation truly is. He mentioned how the effects of social distancing and business closures have negatively affected companies who have experienced a strong downturn if not complete loss of revenue, and in turn have elected to let employees go.
Keep in mind, this type of problem becomes incredibly dangerous because of the snowball effect this type of downturn can inevitably have. When there’s a situation where multiple companies start to cut their workforce simultaneously, the amount of disposable income in the economy decreases, creating a situation where the company’s cost-cutting measures ultimately led to their reduction of sales.
This downward spiral becomes especially dangerous when it isn’t only industry or company-wide, but rather, worldwide.
5.5 million new applications is an astronomically high number, especially considering the closest figure was almost 700k in October of 1982. However unlikely, it’s just as plausible since the CARES Acts signed into law last week included extended unemployment benefits to people who were previously considered ineligible like self-employed and private contractors.
Google also corroborates this information since their data shows searches for unemployment benefits and qualifications have soared during this last week.