Unemployment Is Already Bad - And It Will Get Worse

Last week, unemployment spiked in the United States. The charts above show how serious it was -- with about 3.3 million new unemployment claims.

The top chart (from the Economic Policy Institute) shows the weeks claims in relation to claims in the past in recessions. The previous record for claims in one week was slightly over 600,000. Last weeks claims were much more, and was likely an undercount. That's because the phone system and internet systems were overloaded, and could not handle all the people wanting to make a claim.

The second chart (from The Washington Post) shows the percentage of the labor force submitting new claims in each state.

It is now predicted that the unemployment rate for March will be in the 5.5% range. But it's going to get much worse in April (and could continue to rise for several months). It could top the double-digit numbers seen during the Bush recession.

Currently the Coronavirus epidemic is still rising (and the United States now has more cases than any other country). The unemployment numbers will not come down until the epidemic is over, or at least under control.

But the virus does not get all the blame for the recession we are in. Trump must accept blame also. If he had acted swiftly to initiate testing back in January, the country could have gotten control of the epidemic. But his delay has allowed the epidemic to get out of control. Now we won't see a better economic condition until control is established.