Businesses nationwide have been devastated by the coronavirus-related shutdowns as state and local governments seek to "flatten the curve" and slow the spread of COVID-19, which means unemployment rates are spiking. One estimate from Goldman Sachs indicates more than 2 million people may file unemployment claims this week, according to The Wall Street Journal.
The outlook: Last week, the number of jobless claims jumped by 70,000 to 281,000, reaching the highest level since 2017. Oxford Economics said the rise was a "small preview of what's to come," according to NPR.
If Goldman Sachs' estimate is correct, that would be an understatement.
"State-level anecdotes point to an unprecedented surge in unemployment this week," a Goldman Sachs Economic Research report read. "These anecdotes suggest that the next jobless claims report covering March 15-21 will show that initial claims rose to roughly [2.25 million], the largest increase in initial jobless claims and the highest level on record."
Goldman Sachs warns data point to a historic and frankly apocalyptic surge in unemployment insurance claims, from c… https://t.co/IqRpiw2G8H— Michael S. Derby (@Michael S. Derby)1584666159.0
The report pointed to severe declines in consumer spending in sports and entertainment, hotels, restaurants, and public transportation.
Trying to keep it quiet? The New York Times reported Thursday that the Trump administration instructed state labor officials to provide unemployment numbers in generalities rather than specifics until the federal government releases numbers next Thursday:
In an email sent Wednesday, the Labor Department instructed state officials to only "provide information using generalities to describe claims levels (very high, large increase)" until the department releases the total number of national claims next Thursday.
The email, which was shared with The New York Times, noted that the reports were monitored closely by financial markets and should therefore remain embargoed. "States should not provide numeric values to the public," wrote Gay Gilbert, the administrator of the department's Office of Employment Insurance.
Stimulus efforts: Congress and the White House are working on an economic stimulus package that could exceed $1 trillion and may include direct payments of $1,000 or more to Americans who are below a certain income threshold.
A Senate GOP proposal set that threshold at $75,000 annually for individuals and $150,000 for families. The amount of the aid check would diminish gradually for families that exceed that income, and individuals who make more than $99,000 per year or families that earn more than $198,000 would not be eligible. Some GOP senators have expressed concern about potential waste involved in sending direct cash payments to Americans who currently earn enough money as to presumably not be in need of the cash boost.
The proposal also includes measures to provide tax relief and/or easier access to loans for small businesses and corporations, particularly in severely-impacted industries such as the airline industry.