The fallout from the coronavirus pandemic escalates.
Weekly jobless claims surged to a record-breaking 3.28 million in data released Thursday. The total was well above the previous record of 695,000 in October 1982.
To stem the damage, the Senate approved a $2 trillion stimulus bill as part of relief efforts to fight the economic damage from the coronavirus outbreak.
Steven Mnuchin, U.S. Treasury secretary, highlights the benefits of the bill.
“The good thing about this bill is the president is protecting those people, so you know now with these plans, small businesses hopefully will be able to hire back a lot of those people. Last week they didn’t know if they had protections. They didn’t have any cash; they had no choice. Now with this bill passed by [the Senate], there are protections. And as I said, hopefully those workers will be rehired but between these three programs, it protects all of American workers. And by the way, lots of big companies do continue to hire for obviously grocery stores, pharmacies, delivery services, these companies are on overtime. So, I know they’re hiring people as fast as they can.”
Three market watchers weighed in on the jobless claims on CNBC.
A ‘V’ shape rebound
Austan Goolsbee, former White House economic advisor, said perhaps a ‘V’ shape sequence could occur in the economy.
“It’s a brutal week. We know it’s going to be a brutal week. Let’s hope they can get the relief out quickly, because I think it’s clear people are going to need relief. I think we’re in a circumstance where we just spent $2 trillion. It’s not really going to be stimulus in the conventional sense. We’re going to take the money and we’re going to burn it to keep people warm. And so, we’re definitely going to need another round of relief, and when we start to unpack what was in this one — and it was done so hastily — there’s going to be problems with it. I am a little afraid of, let’s call it the political will, the political legitimacy, of these rescues. So, in a way, the fact that this was as abrupt and severe and all in one week as it was is a sign that maybe the ultimate ‘V’ shape could exist.”
More stimulus ahead
Glenn Hubbard, former White House economic advisor, said he agrees with Goolsbee on seeing another round of federal aid.
“I think I broadly agree with Austin [Goolsbee], a pandemic is not a typical recession. This was a shutdown of the economy for legitimate health-care reasons. And the purpose of a federal bill at the moment really is a kind of freeze in place, simulate a normal economy, [and] try to keep people attached to jobs, and keep incomes. The recovery bill obviously had to be done quickly so it’s not perfect, but I think particularly with small and midsized businesses, it offers important aid, and the strengthening of unemployment insurance is also a very good idea. We’re definitely not out of the woods, there are market stressors, there are real economy stressors. And I agree with Austin, there will have to be some sort of follow-up bill. It’s more of a true stimulus measure. But so far, I think policy has stepped up to the plate and now the question will be, can it work? Is the implementation there? “
Leveling out the aid
“I think we’re a strong country, we’re a democracy. I think that there are people who want to do what’s right. What we have, I think, is kind of a misallocation of where people really need help versus other places where it’s almost like they’re ready to go back to work. … So, this is not despair. It’s more let’s get it evened out. Let’s get the people who really need it, the help, stay strong. But I think you’re right. In the end, what we’ve got here is a problem that I believe can be beaten. I just wish the damn thing wasn’t so crafty. We don’t see it, we don’t know it, it’s on the surfaces. But I just think that we’ve got to get it so that the lockdown works. San Francisco’s got very few cases, New York has a lot. Let’s just make it so that it’s not state by state, city by city, and get the resources to where people really need it and focus on the fact that it’s not as horrible as it seems.”