Dear Commons Community,
The latest Labor Department figures indicate that another 6.6 million filed for unemployment last week bringing the total number of claims over 16 million for the past three weeks. Two years of job losses from the last recession of 2008 produced barely half that total.
Many economists say the actual job losses are almost certainly greater, and there is wide agreement that they will continue to mount.
It’s as if “the economy as a whole has fallen into some sudden black hole,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics.
The Federal Reserve redoubled its effort to break that fall on Thursday with an ambitious plan to help companies and state and local governments gain access to funding. The Fed said its new and expanded programs could pump $2.3 trillion into the economy.
The central bank’s intervention was welcomed in financial markets, with the S&P 500 stock index ending the day with a gain of almost 1.5 percent.
But additional relief from Washington hit a Senate roadblock over what to include. Republicans have proposed $250 billion to replenish a loan program for distressed small businesses, while Democrats want $250 billion more to assist hospitals and state and local governments dealing with coronavirus-related expenses and revenue shortfalls.
What it will take to stabilize the economy is no more than guesswork, many analysts say. The purposeful and sudden halt in economic activity has no precedent, and no one knows when the restrictions on movement and commerce enacted to slow infections will be lifted.
Several economists expect that by the end of the month, more than 20 million people will have been thrown out of work, pushing the unemployment rate toward 15 percent. In February, it was 3.5 percent, a result of 113 straight months of job growth.
Washington we have a problem!