Report

A record 3.3M Americans file for unemployment in just a week

Friday, March 27, 2020 by Robinhood Snacks | Disclosures

Bad record to hit... Last week, almost 3.3M Americans filed for unemployment benefits. We knew that as entire states/cities went on lockdown, non-essential workers (and those not able to WFH) were being laid off and deprived of income. But even Goldman Sachs' seemingly devastating prediction was way off the actual unemployment number:

  • 3.3M is by far the largest weekly unemployment on record — it's nearly 5X larger than the previous record of 695K, set in 1982.
  • It's a massive jump from the 282K unemployment claims filed two weeks ago. US employers have added jobs to the economy for a record 113 months straight — a streak certain to end this month.

Getting very real... This is the first really concrete news we have about the economic pain precipitated by COVID-19 (though the economy has felt it for weeks now). But we also have some positive concrete news, which is the $2T economic stimulus bill, expected to become law next week. It includes incentives for businesses not to lay off workers and extra funds for those who need to file for unemployment benefits.

THE TAKEAWAY

An unemployment safety net is crucial... Not getting laid off in the first place is better. Still, unemployment benefits might prove more important than one-time checks or loan incentives to businesses, since the government can't force small biz to pay workers who aren't working. Some could decline the government's loan-that-become-grants offer and choose to save right now by laying off workers — many already have, as evidenced by the unemployment numbers.