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‘We Will Survive’ 22 Million Job Losses, Economist Says

The coronavirus pandemic has wiped out nearly all the job gains since the Great Recession of 2008 and 2009, erasing more than 22 million jobs in just the past month.

Data shows 5.245 million Americans filed for first-time unemployment benefits for the week ended April 11, the U.S. Department of Labor said Thursday. That number, added to the three-week total of nearly 17 million, means total job losses now exceed 22 million.

While the latest weekly first-time claims report is lower than the number of new claims filed a week earlier–the Labor Department revised the initial report of 6.6 million in new claims filed up to 6.615 million for the week ended April 4–the total number of American workers impacted by layoffs or furloughs is expected to climb higher in the weeks ahead. Many state unemployment offices are backlogged on processing claims, which could mean the numbers are even higher.

How high could it go? And is this just a temporary blip?

No one really knows for sure, but U.S. chief economist for S&P Global Ratings Beth Ann Bovino said it shouldn’t be surprising to see 24 million jobs lost in April. Speaking at an Institute of International Finance webinar Thursday on the U.S. economy, Bovino said she’s expecting a “slow recovery,” citing several risk factors.

“The risk of a second wave, even if we don’t have one, will be on everyone’s mind,” Bovino said. She also questioned whether people will really want to go to the malls, see a movie or walk into crowded restaurants as they did before the coronavirus outbreak. And she’s not even sure if many of the businesses that have since shut their doors will be in a position to reopen. That suggests that many of those on furlough could end up receiving unemployment benefits a lot longer than initially expected.

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“We will survive. Jobs will come back. It’s gonna take some time,” Bovino said.

“I see the unemployment rate [going] up to 14 percent. As you reasonably re-engage [and open up the economy], it’ll get back down to 8 percent by the first quarter,” Jonathan Pingle, a managing director and head of economics for global fixed income, Americas, for BlackRock Inc., said during the webinar. Even if rates drop to 8 percent, “that still leaves you a relatively large amount of unemployment,” he added.

Pingle expects jobs will be reallocated over time as business dynamics get back on track, presumably with the help of more federal government policy stimulus packages in place.

“While the initial claims measure new applications for insurance–or the flow into unemployment–continuing claims are a measure of the stock, or  number, of unemployed. The data lags an extra week, but already show a record 12 million receiving benefits,” Jay H. Bryson, acting chief economist at Wells Fargo Securities, said.

Bryson expects that the unemployment rate for April could exceed 15 percent when the April data is released on May 8.

Meanwhile, the state of New York, and other East Coast states, have extended the shutdown on non-essential businesses, which, while necessary to staunch the spread, could further exacerbate job losses.

“New York on PAUSE will be extended in coordination with other states to May 15,” Governor Andrew Cuomo tweeted Thursday afternoon from his account @NYGovCuomo. “Non-essential workers must continue to stay home. Social distancing rules remain in place. We must STAY THE COURSE.”

New York has been working with an East Coast coalition including New Jersey, Pennsylvania, Rhode Island, Connecticut, Massachusetts and Delaware toward a coordinate regional response.