The past seven weeks of the US job market has seen an astounding collapse. On May 7th, the US Department of Labor announced that another 3.16 million Americans filed for unemployment benefits bringing the 7-week total to 33.5 million. About 15.5% of the eligible workforce is now receiving aid.
Given that not all applications for unemployment aid are accepted and that the pandemic is restricting activities, the official numbers are likely lower than the true number of people out of work. And the unemployment rate for April is now expected to go even higher, far higher than the 10 percent registered at the height of the Great Recession of 2009. Some economists are expecting a 40% decline in GDP in the second quarter. Clearly, America is facing its worst economic downturn since the Depression.
Since the economic stress is a direct result of the covid-19 pandemic, how quickly an effective treatment and eventually a vaccine can be developed, will determine the speed of both the health and economic recoveries.