The Latest Weekly Unemployment Claims and Looking Ahead

By at 14 May, 2020, 12:49 pm

by Raymond J. Keating-

The U.S. Department of Labor reported that seasonally adjusted initial weekly unemployment claims registered 2.98 million for the week ending May 9th. That brings the eight week total for COVID-19-related unemployment claims to 36.5 million.

The following chart shows how unprecedented the recent initial claims numbers are, even when compared to the Great Recession running from late 2007 to mid 2009.

Source: Federal Reserve Bank of St. Louis, FRED

As we look ahead, the strength of the eventual recovery will depend on many factors, including a vaccine and/or therapeutics addressing COVID-19; any spikes in cases; the pace of businesses reopening; consumer responses to reopening businesses; how many businesses ultimately will be lost; and federal and state policymaking, such as related to taxes and regulations.

When we look at what ultimately will generate economic recovery and expansion, it will have nothing to do with so-called government stimulus efforts (I would classify current government aid efforts as being more survival undertakings in response to the pandemic and government shutdowns).

Instead, recovery and expansion will have everything to do with entrepreneurship, small businesses and private-sector investment. Those undertakings remains central to growth, and if government undermines such endeavors, then the economic misery will be stretched out far longer.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.


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