March was the longest month in the history of the calendar. At the beginning of the month, people were going to offices, children were in classrooms, restaurants were bustling, planes were flying, and colleagues were shaking hands. The lead New York Times articles for March 1 covered Joe Biden’s victory in the South Carolina primary and the agreement between the United States and the Taliban to end the war in Afghanistan. A single article on the front page (below the fold) addressed the risk of a coronavirus epidemic in America, which stood then at 69 confirmed cases and two deaths, concluding that “With its top-notch scientists, modern hospitals and sprawling public health infrastructure, most experts agree, the United States is among the countries best prepared to prevent or manage such an epidemic.”
A little more than one month later, there are 337,933 diagnosed cases of COVID-19 in the United States, with 9,653 reported deaths (as of April 6). Ninety percent of the population is under state-ordered directives to remain at home. Every K-12 school in the country is closed, and 76 million students (along with their parents) are figuring out how to learn remotely. A Google search for “how to make a face mask” returns over 1.1 billion results. What a difference a month makes.
The economic toll of the effort to curb the spread of COVID-19 is beginning to become evident. Economic data is, by definition, backward-looking and lagged, and becomes stale particularly quickly when circumstances evolve rapidly. Nevertheless, some higher-frequency data over the past few weeks provide insight into the depth and breadth of the economic damage that continues to unfold.
Until recently, the worst initial claims for unemployment in history occurred during the 2008-09 financial crisis, peaking when 665,000 workers filed for unemployment in a single week in early 2009. Eleven years later, that record was smashed with initial claims of 3.3 million in the third week of March 2020, doubling to 6.6 million claims the fourth week. Throughout the entirety of the global financial crisis, the economy shed a total of 8.4 million jobs: We have now lost more than that in two weeks. These new data points make it difficult to even see the global financial crisis in the nearby graph, and initial claims are likely to grow even further over the course of April. This implies that 6.7% of the entire U.S. labor force filed for unemployment just in the last two weeks of March, pushing the notional current unemployment rate well over 10%.