The latest figures released by the Department of Labor’s Bureau of Labor Statistics show that 5,245,000 more Americans filed for unemployment insurance in the week ending April 11. That’s a decrease of 1,370,000 people compared to adjusted claims from the week before. The principal cause, as in the rest of the last four weeks, was layoffs due to the COVID-19 outbreak.
More than 22 million Americans have lost their jobs in four weeks. According to economists cited by Reuters, the unemployment rate could reach 20% this month—the highest it’s been since the Great Depression. The International Monetary Fund made a similar prediction earlier this week: the international organization said earlier this week that the “Great Lockdown” economic shutdown could cause the global economy to shrink as much as 3% and the U.S. economy specifically by 5.9%. By comparison, during the Great Recession of 2009, the world economy shrank by 0.1%. A 3% global collapse would also be the worst such decline since the Great Depression.
Manufacturing, a sector already left out of burgeoning economic growth at the beginning of the year, has not escaped. The Federal Reserve’s April 15 report on industrial production and capacity showed that total industrial production fell 5.4% in March. Manufacturing output fell 6.3%, its sharpest drop since February 1946, after World War II. Motor vehicle and parts output fell a dramatic 28% as U.S. automakers closed their plants to avoid transmission among workers.
In New York, one of the virus’s hotspots in the United States, the Empire State federal reserve recorded a second month of record low manufacturer sentiments: 85% of manufacturing executives surveyed said business conditions had improved, and the general business conditions index fell 57 points to -78.2. A rating above 0 indicates improving conditions.
The latest indicator of the struggling economy comes as low-income individuals began receiving stimulus checks from the federal government from the third coronavirus stimulus bill and the President grappled with governors over the power to reopen the economy. While most officials agree that the economy should reopen soon, they differ in how cautious the move should be. The ability of experts to gauge the danger of the situation has been hampered by a lack of available testing for the virus. A fourth stimulus bill has yet to materialize from Congressional negotiations.
