We're in a full-blown recession, if not worse

Data on jobless claims show the sharpest downturn ever

There is no sugar-coating of the current economic situation in the US. Though still early, it looks like we’re on track to enter the worst unemployment situation since the Great Depression. Things will be at least as bad as they were during the global financial collapse in 2008.

New data on joblessness highlight this depressing reality. According to the government’s latest figures out today, the number of people filing for unemployment benefits hit a record high of 6.6m people—up from last week’s record of 3.3m claims:

Put another way, unemployment claims have increased 3,200% what they were a year ago. It’s hard to put the scale of these data into words. I think the chart does a pretty good job of conveying the scale of the situation.

Another recession indicator is how many people actually receive unemployment benefits from week to week. Those numbers are also up; by 80% compared to a year ago. Since 1970 we have not observed such a sharp increase in the number of so-called “continued claims”:

What matters besides the increase is how long it lasts. Here, we enter more uncertain territory. Epidemiologists have reached no consensus over when the virus will let up, but the latest projections from the Institute for Health Metrics and Evaluation at the University of Washington suggest it could peak over the next few weeks yet last well into the summer.

The hope is that the economy will be able to restart quickly—a sort of dead-cat bounce—once this is all over. In the meantime, we’re living through record-setting unemployment and an unprecedented economic collapse. The impacts on all our lives will reach far beyond covid-19’s direct toll on human lives.