The Long Winter: Number of people filing for unemployment insurance hits 36.4 million and unemployment rate at highest level since the Great Depression

The economic situation continues to deteriorate as 36.4 million Americans have now filed for unemployment insurance in the last 8 weeks. This is a daunting number that is down right shocking given that only two months ago, we were near “full employment” and the stock market was near all-time highs. The number of people filing for unemployment insurance is startling and the pace at which we are losing jobs is distressing. For now, frontline jobs in hospitality, entertainment, and travel are taking big hits but you are now seeing secondary impacts in other industries like Uber, retail, and some tech companies that were not positioned well to deal with this crisis. It is becoming clear that this is going to be a long winter in terms of the economic fallout.

36.4 Million Filing for Unemployment Insurance

Many states are now seeing their stable and solid budgets of early March falling apart by the pressure of millions of Americans filing for unemployment insurance and tax shortfalls. This crisis is something not seen in a generation and many people around the world have not had to deal with a pandemic and the economic fallout on a highly interconnected global supply chain. Most countries are not isolated islands and we tend to trade and interact with each other at a very high level. So having this crisis unfold around the globe is essentially putting a big pause on economic activity.

Take a look at the number of people filing for unemployment insurance:

This is an incredibly high figure. The impact is now being seen rippling throughout the economy. Millions of Americans are now filing for assistance on their mortgages since they are unable to pay the most basic of bills. Keep in mind that before this crisis hit, half of this country was already living paycheck to paycheck. So here we are now seeing the fallout when the checks stop coming in and this is only 8 weeks in. With some seeing a second wave of the virus in the fall, we really need to get a handle on this over the summer or this is going to shatter the economy even more. 

The unemployment rate is at the highest level since the Great Depression:

And the reality is, the unemployment rate is actually worse given that the data in the chart above lags a few weeks. We are in a precarious situation and need to get a handle on this outbreak with testing and systems in place to allow people to have the confidence to start slowly opening up. 

This is going to reshape how people think and interact with one another. I think people that think we are going back to normal have no idea as to the new world when we come out on the other side. 

This is going to be a long winter and we need to step it up so we can salvage as much of our economy before it takes additional shocks to the system.  

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