In response to Thursday’s initial jobless claims report, Ball State University economist Michael Hicks, says the numbers reflect the accelerating closure of commerce as Americans quickly adapt to social distancing and face stay at home orders in a rapidly widening number of states.
The U.S. Labor Department reports that 6.648 million people filed for unemployment benefits last week — doubling the record set a week earlier.
“In the short term, this is naturally very frightening to economy watchers, but viewed over the medium or long term suggests a quickening of job losses which would otherwise have slowly occurred throughout the Spring and Summer,” said Hicks, director of the Center for Business and Economic Research at Ball State. “The fundamentals have not changed. Roughly 28 million workers are at risk of job losses through their employment in businesses which directly interact with the public.”
Research from a recent BSU study found that COVID-19 and extreme social distancing in the U.S. could be more than sufficient to create a recession The study also found that the effect of a 45-day social distancing would reduce GDP significantly, and cause relatively large job losses of nearly 10.6 million, nationally. After 90 days of social distancing, they anticipate the unemployment rate to spike nationally to 14.6%.
Hicks goes on to say that, “These job numbers are not a sign of things getting worse, I think it is a sign of a more forceful response by households, businesses and state and local governments.”