Headline 20% Unemployment Rate Could be Here Soon
This is worth repeating: The official, Trump government-released, headline unemployment rate, may spike to Great Depression levels: a 20% Unemployment Rate in the United States in mere months.
Why? Because huge sectors of the economy are shutting down, some completely, and these newly-jobless workers aren’t exactly going to have an easy time finding replacements at the other restaurant down the street, or the other cruise ship, or the other airline, or the other chiropractor, or the other gym, or the other bookstore, or the other movie theater, or the other (insert any number of other industries here).
Both the U-3 (narrowly defined ) and U-6 (broadly defined) unemployment rate trackers are set to reflect a huge jump. It is not yet clear if this massive jump will be reflected in the March jobs report, which comes out at 8:30AM on the first Friday of the month, which in April, will be on the 3rd.
The reason why these huge job losses may not yet be reflected is because the sample date for the household survey portion was taken on the 12th of this month, which was unlikely to capture the full damage that has occurred over the month as a whole.
But the bad prints are coming, and coming fast. If the U-3 isn’t up by at least a full percentage point and U-6 by at least two full percentage points with the April 3rd release for the month of March, expect to see this, possibly far worse, come May.
And the “or worse” is no hyperbole. Trump’s very own Treasury Secretary, Steven Mnuchin, warned on Tuesday that we could be looking at a 20% Unemployment Rate in this recession. Let’s not mince words here, these are Great Depression numbers not seen since the 1930s.
Bloomberg: Mnuchin Warns Virus Could Yield 20% Unemployment Rate Treasury Secretary Steven Mnuchin raised the possibility with Republican senators that U.S. unemployment could rise to 20% without government intervention because of the impact of the coronavirus, according to people familiar with the matter.
He told the senators that he believes the economic fallout from the coronavirus is potentially worse than the 2008 financial crisis.Read the whole story on Blomberg.com
We are already starting to see this in the numbers
- A PBS/NPR poll just taken has found that 18% of American workers have already been laid off or had their hours cut because of the coronavirus crisis.
- This number is even worse for those who were making less than $50,000 a year, with fully 25% in this income group reporting having been laid off or having had hours cut this month.
- In the New York Fed’s region, the headline General Business Conditions Index fell an eye-gouging 34 points in March to a deeply negative and fully recessionary level of -21.5, with the average workweek falling to a painful -10.6. And this survey was taken between March 2 and March 10, before even harsher economic declines hit that region over the last week.
- Announced layoffs have seen a marked rise during the month. “[Employment situation] has all gone to hell.”