In Some States, Unemployment Is Up 4,577%
Things were going good. That seems so long ago. For some states, like Georgia for example, unemployment is up 4,577% from 2019.
More people will be laid off this week. Some elected to take the generous, and unprecedented, state and federal unemployment insurance to wait out the pandemic without going broke. Some lost jobs that aren’t coming back. Over 30 million people have filed for unemployed because of the new SARS outbreak, first reported in China in December.
Every state in the U.S. has seen its unemployment numbers swell by thousands of percent.
The worst hit, in terms of jobless claims between January and April 27 are Florida (3,650%); Louisiana (3,044%); North Carolina (2,314%); Oklahoma (2,218%); Mississippi (2,006%) and New Mexico (2,002%).
The two states with the least amount of layoffs are some of the least populated: Idaho (143%) and Montana (174%), based on data collected by financial services portal WalletHub.
Although the hardest hit in percentage terms looks bad for the January to April period for the southern states, the pandemic pretty much soaked all states equally.
The pandemic forced governments around the world to take what the World Health Organization referred to as an “all of government, all of society” approach to stopping the spread of the new SARS. The mysterious virus, claimed by Washington to have leaked from a lab in Wuhan, China, is not as deadly as first feared but spreads easily, meaning that even if the mortality rate was equal to that of the flu, more people are likely to catch it and therefore the death toll will be higher. The worst flu seasons have killed as many as 80,000 people over a period of around six months. The new coronavirus disease has killed nearly that in the U.S. in roughly two months due to the higher infection rates.
To ward off the virus, people were forced into quarantine. Non-essential businesses were closed. Government’s were forced to spend trillions on backstopping small and mid-sized businesses from going under.
Some 8.8 million jobs were lost in the Great Recession of 2008-09. Since then, around 22.7 million jobs were created starting in 2010 and going to January 2020. Given the current job losses, all of that has evaporated, based on data from the Bureau of Labor Statistics and the St. Louis Federal Reserve.
Most people in the market think the majority of those jobs will come back by the end of this year, with travel and tourism being the slowing sector to bring back its laid off staffers, BNP Paribas said in a note to clients on Thursday.
So far, the worst day for employee job losses was April 12th, right at the start of the April employment survey period.
But now as states partially reopen for business, people are tip-toeing back to work.
All states remain deep in negative job loss terrain. What matters in the here-and- now is the sequential speed of the recovery in jobs, RBC Capital Markets said in a report today.
Unemployment is currently around 18%. Jobless claims rose by 3.2 million after market hours on Thursday, beating market estimates of 3.05 million.
Keith Wade, chief economist for Schroders, thinks, “You could see unemployment go over 20%.” Great Depression unemployment was 25%. “The big difference here is that the government can get people back to work,” says Wade. “You need to have an exit strategy that has a lot of the economy coming back on line by the end of June.”
That means fully, not partially.
One of the biggest takeaways from the WalletHub data is that states with less office labor suffered the biggest drops in employment. Once again, Georgia is a standout as the state with the biggest increase in unemployment since the start of the National Emergency in March.
New Hampshire came in second, followed by Kentucky, Louisiana, Florida, North Carolina, Virginia, India, South Dakota and Michigan.
New York and New Jersey, the national epicenter of the outbreak in the U.S., were ranked at 41 and 42, respectively. Unemployment in New York rose 598% from last year and New Jersey unemployment rose 1,061%, according to WalletHub.