Week-over-week since the beginning of the Coronavirus Pandemic, millions upon millions have filed for unemployment. Currently, the United States is sitting at a record of thirty million unemployed. The amount of Americans who filed for unemployment is estimated to be similar to that of The Great Depression.
At the beginning of the week, many states eyed reopening their economies and attempting to get life back on track for their populations; however, even though many businesses are set to reopen. The market is far different than what it was just two months ago. Demand has dried up, people are out of work, and employers are struggling to get their employees back from unemployment.
The good news; “While the number of initial jobless claims has started to recede from unprecedented levels, initial claims are likely to remain elevated for some time,” said Sam Bullard, senior economist at Wells Fargo. Meaning, that week-over-week the jobless claims are declining, but the total amount already unemployed remains far too high.
As of April 30th, 2020 – over thirty million people have successfully filed for unemployment, with potentially millions of Americans stuck in backlogging. In addition, another large amount of Americans have most likely been denied unemployment, which means that the jobless claims are probably higher than that of the thirty million unemployment claims.
The labor market is one casualty out of many because of the Coronavirus, just yesterday it was reported that the United States Gross Domestic Product contracted by 4.8% in the first quarter. The contraction percentage is expected to be far worse once all of the final revisions are complete.
Economists are also warning that the first quarter is not the worst of it. The worst of it is most likely to be revealed in the second quarter, which, according to economists, will be far worse than anything the United States has ever seen. Also, Nonfarm payrolls for April are expected to show a decline of 2.25 million, with an unemployment rate of 15.1%, according to preliminary estimates from FactSet.
U.S. personal spending in March plunged by the most on records going back more than six decades on Thursday. Personal-consumption expenditures, or household spending, tumbled 7.5 percent in March from the previous month, the Commerce Department said. That was the steepest monthly decline since 1959 and compared with economists’ expectations for a 5 percent drop.
Across the world, Christine Lagarde, the President of the European Central Bank, said the speed and scale of the collapse in economic output currently being experienced by the eurozone was “unprecedented in peacetime.” Lagarde continues, ‘the modeling suggested euro area GDP would fall by between five and twelve percent this year.’
However, given the bleak economic outlook facing the United States, now might be a good time to bring manufacturing back home. Currently, so much of the United States economy is made in China, and with personal spending at an all time low, jobless claims at an all time high, and sharp economic contractions it might be time to return the wheel of manufacturing and exports to the shores of the United States.
While President Trump, before the Coronavirus, was working to bring large manufacturing back to our shores, he faced backlash from Democrats who favored imports rather than exports. Regardless, President Trump made an impact on state-side manufacturing, and now might be the best time to expedite the return of such.
Further, America’s infrastructure is failing, and while so many are out of work, construction brings good income to households across the country and what better to build than our own economy. The world is widely interconnected, and sure things are cheaper in China, but our economy needs the kick because the energy sector is currently taking a beating from all the lack of demand.
Our large cities are dark right now, but there is hope.