Only a few specks in this Oculus.
(Updated 1:50 p.m. EDT, March 30, 2020)
Topline: The coronavirus outbreak could cost 47 million jobs next quarter, according to estimates by economists at the Federal Reserve Bank of St. Louis.
- 47 million lost jobs translates to an unemployment rate of 32.1%, well above the 24.9% rate of unemployment during the worst of the Great Depression.
- A record 3.28 million people filed for unemployment benefits for the week ending March 21, 2020—that’s more than quadruple the previous record of 695,000 set in 1982.
- This negative shock does not affect all sectors equally: While many professional services workers are able to work from home, those in occupations that require direct person-to-person contact are much more likely to have their jobs disrupted as a result of the outbreak.
- The Fed’s researchers qualified their estimate with a few important caveats: They assume the labor force is constant and that discouraged workers don’t stop looking for work (which would bring down the unemployment rate); business may furlough workers instead of laying them off; and they did not include estimates of how the federal stimulus package will affect the labor market.
Crucial quote: “These are very large numbers by historical standards, but this is a rather unique shock that is unlike any other experienced by the U.S. economy in the last 100 years,” wrote Fed economist Miguel Faria-e-Castro.
Key background: Film studio Twentieth Century Fox, which dismissed 120 Los Angeles-based employees, and online hiring marketplace ZipRecruiter, which laid off or indefinitely furloughed 400 of its approximately 1,200 full-time employees, are the latest company to dismiss workers as a result of the ongoing coronavirus crisis. According to data from Johns Hopkins, there are now more than 143,000 confirmed cases of the coronavirus in the United States and more than 2,500 people have died.
