Alarming as they are, these data are likely to underestimate how dire the situation is for American workers, for two reasons. First, they are already out of date. The covid-19 pandemic has only intensified. Around a dozen states have announced lockdowns since March 21st. Second, the data only account for those newly laid-off workers who succeeded in filing for benefits. Many workers were stymied in their efforts to do so by clogged phone lines and crashed state employment websites. The latest report shows that only 187,000 people in California filed unemployment claims. Assuming that Californians, whose state went into lockdown on March 19th, were laid off at the same rate as the rest of the country, a rough calculation suggests the figure for the state should be closer to 400,000.
All this marks a dramatic reversal for the longest period of economic expansion in American history. The unemployment rate fell to 3.5% in February, the lowest in five decades. Now bank analysts reckon that America’s GDP could fall by double digits in the second quarter of 2020. The Economic Policy Institute, a left-leaning think-tank, predicts that nearly 14m workers will have lost their jobs by June, representing nearly one-tenth of the country’s labor force. America’s economy is going to sink much further before it starts to recover.