- Last week, a staggering 3.28 million people applied for unemployment in the United States.
- The number beats the previous 1982 record and weekly claims during the 2008 Recession by millions.
- However, economists say the new wildly high unemployment numbers are more akin to what is seen in times of natural disaster rather than “typical recessions.”
- In an extremely rare televised interview, Federal Reserve Chair said the economy may already be in a recession, but he appeared optimistic that the country could possibly bounce back quickly once the virus is under control and businesses reopen.
Unemployment Claims All-Time High
More than 3.28 million people filed unemployment claims last week, according to the Labor Department.
The number is a stunning indication of just how rapidly and how extensively businesses like restaurants, hotels, gyms, movie theaters, etc. have shut down as the COVID-19 pandemic batters the United States.
By contrast, this new number shattered the previous record (695,000 claims in 1982) for the highest number of unemployment claims filed in a single week. It also greatly surpassed any week of the 2008 Recession, which capped at 665,000 during a single week.
However, comparing the coronavirus’ economic impacts to “typical” recessions isn’t quite accurate. This is because those recessions generally play out over a series of months or years.
For instance, while the 2008 Recession never saw weekly unemployment hit the millions, unemployment was higher than average for five years. In fact, if you added together all of the weeks of above-average unemployment, you’d get a total of about 26 million claims filed.
With the coronavirus, however, while the U.S. might see extremely high unemployment rates, many economists only expect it to last for a matter of weeks. Since the two circumstances are so wildly different, that can also make it difficult to use “typical” recessions to predict what will happen in the U.S. economy even a month or two from now.
Still, many economists predict that unemployment could climb as high as 40 million people by April, so while it may not be like “typical” recessions, this already is and will likely continue to affect millions of people.
On top of that, many trying to file for unemployment have recounted horror stories of websites crashing and being on hold for hours, many only to be told once they finally reach someone that they don’t qualify.
Treating the Coronavirus Like a Natural Disaster
Many economists are telling people to view the coronavirus pandemic less like the 2008 financial crisis and more like a natural disaster, which can cause the immediate shutdown of an entire economic region.
One big example is Louisiana and Hurricane Katrina. On average, about 4,000 unemployment claims are filed each week in Louisiana. When Katrina hit in 2005, there was a massive, yet momentary spike in unemployment claims.
That spike is similar to the nearly 73,000 people who filed unemployment claims in Louisiana last week. Of course, now, it’s not just Louisiana that’s experiencing a rapid surge in unemployment.
Just about every state in the country has seen a significant rise, with states like California, Massachusetts, Michigan, New Jersey, Ohio, and Texas all boasting some of the largest numbers. It should be noted, however, that these are all highly populated states and the average unemployment rate for each state varies.
- Weekly Average: 52,200
- Claims Filed Last Week: 186,809
- Weekly Average: 8,000
- Claims Filed Last Week: 147,995
- Weekly Average: 15,000
- Claims Filed Last Week: 129,298
- New Jersey
- Weekly Average: 11,000
- Claims Filed Last Week: 155,454
- Weekly Average: 187,784
- Claims Filed Last Week: 13,000
- Weekly Average: 16,900
- Claims Filed Last Week: 155,657
By far, the biggest spike in unemployment claims was in Pennsylvania, where nearly 380,000 people filed for unemployment. That’s up from an average weekly filing of 21,000 claims.
Are We In A Recession?
Thursday morning, in an extremely rare televised interview, Jerome Powell, Chair of the Federal Reserve, spoke with Savannah Guthrie on The TODAY Show. Prompted by a question from Guthrie, Powell said the country “may well be in a recession.”
“But I would point to the difference between this and a normal recession,” he added. “There is nothing fundamentally wrong with our economy. Quite the contrary. The economy performed very well, right, through February. We’ve got a fifty year low in unemployment in the last couple of years, so we start in a very strong position.”
“This isn’t something that’s wrong with the economy. This is a situation where people are being asked to step back from economic activity, close their businesses, stay home from work, so in principle, if we get the virus spread under control fairly quickly, then economic activity can resume. ”
Powell went on to say that once the country is able to get this virus under control, it could see that rebound. Notably, Powell also stressed that it is still unknown how quickly that could happen.
One of the biggest ways the government is trying to hold up the economy is through a $2 trillion dollar stimulus package. Wednesday night, the Senate unanimously passed that 96-0. It now goes to the House, which is expected to vote on it tomorrow morning.
If it passes without any revisions, it would then head directly to President Trump, who’s said he would sign it immediately.
News of the bill’s passage through the Senate led to favorable reactions in the stock market. Between that news and the announcement that Senate Democrats and Republicans were working with the White House to make such a deal, both the Dow Jones and the S&P 500 posted their first back-to-back gains for the first time since February.
In February, the Dow was posting an all-time high of 29,000. By Monday, when Senate Democrats shot down a previous version of the stimulus package, the Dow Jones had sunk to 18,000 points. Notably, it hadn’t been that low since 2016.
By Thursday morning, the Dow was back up to 22,000 points.
See what others are saying: (The New York Times) (The Wall Street Journal) (CNN)
Trump Signs Order Allowing Former Troops to Be Called Upon for Coronavirus Fight
- President Trump signed an executive order that allows for former troops to be brought back to active duty to help fight the coronavirus pandemic.
- This is not an immediate order to call former service members back, but it is typically used when the military is in need of specific skill sets, like persons with high demand medical capabilities.
- Officials are still reviewing who might be activated.
- The order comes just days after the Army called upon former service members to voluntarily rejoin and help in the military’s response efforts. Over 14,000 have expressed interest as of Friday.
Trump Signs Executive Order
President Donald Trump signed an executive order Friday that allows the Pentagon to bring former U.S. troops and members of the National Gaurd and reserve back to active duty to help those already battling the county’s coronavirus outbreaks.
During his press conference Friday night, Trump said the decision allows the federal government “to mobilize medical, disaster and emergency response personnel to help wage our battle against the virus by activating thousands of experienced service members including retirees.”
“We have a lot of people, retirees, great military people — they’re coming back in,” Trump added.
What This Means
The executive order released by the White House states that anyone recalled can remain on active duty for up to 24 months straight. It provides the Department of Defense and the Department of Homeland Security the authority to order as many as 1 million individuals at one time, however, it is not an order to do so.
According to Pentagon spokesperson Jonathan Hoffman, the order applies to units and individual members in the National Guard and Reserves and certain Individual Ready Reserve members who are normally in an inactive status.
Hoffman said that decisions about who may be activated are still being reviewed, but he added, “Generally, these members will be persons in Headquarters units and persons with high demand medical capabilities whose call-up would not adversely affect their civilian communities.”
As of now, the Individual Ready Reserve contains 224,841 members, according to the Department of Defense, and nearly 11,000 of those members “have medical capabilities.”
“This is a dynamic situation, we do not currently have a projected number of expected activations, but the Department is now fully authorized to make activations as needed,” Hoffman said.
He also stressed that the departments would consult with state officials before using any National Gaurd Reserve Component units under the executive order.
Earlier this week, the Army called upon former service members to voluntarily rejoin and help in the military’s pandemic response efforts. The Army said the initial response has been positive, with at least 14,6000 people expressing interest as of Friday.
See what others are saying: (Politico) (CNN) (Fox News)
FDA Authorizes Portable Test Kit That Can Detect COVID-19 in 5 Minutes
- The FDA has approved the use of a new coronavirus test kit that can give positive results in as little as 5 minutes and negative results in 13, leaps faster than the hours and sometimes days laboratory tests normally take.
- The tests are run on a lightweight and small portable device that can be used in emergency rooms, urgent care clinics, and even outside hospital walls.
- Abbott, the medical device company that makes the kits, plans to send out 50,000 tests a day starting next week.
New Test Approved
The U.S. Food and Drug Administration gave Emergency Use Authorization to the medical device company Abbott for a new coronavirus test kit that gives results within minutes.
Abbott announced the news in a Friday press release, saying it plans to start delivering 50,000 tests a day beginning next week. The tests run on the company’s ID NOW platform, a portable device about the size of a small toaster than weights only 6.6 pounds.
Its portability means it can be used directly in an emergency room or urgent care clinic and even, “outside the traditional four walls of a hospital in outbreak hotspots.”
The company called it “the fastest available molecular point-of-care test for the detection of novel coronavirus(COVID-19), delivering positive results in as little as five minutes and negative results in 13 minutes.”
Second Rapid Test to Be Approved by FDA
The approval from federal health officials means that regulators were satisfied with the test’s validation data and are confident that its benefits outweigh any risk, like false positives or negatives.
The FDA’s approval marks the seconds time it has green-lit a fast working test that could accelerate testing across the country. Last week, it approved a 45-minute rapid point of care test by the molecular diagnostics company Cepheid. However, that test is primarily intended for emergency rooms and hospitals, not doctors’ officers or urgent care clinics.
Still, those turnaround times are leaps faster than the hours to days it takes most laboratory tests to bring results.
Medical Shortages Still Cause Concern
The approval of the Abbott test comes as cities across the nation battle with numbers of potential patients that surpass available tests and resources. Even with insufficient testing, the United States became the country with the largest number of reported cases of coronavirus on Thursday, exceeding China and Italy. By Friday, the U.S. hit more than 100,000 cases.
Many fear that shortages of other critical medical equipment, like masks and swabs, could stifle the new rapid test’s impact. That’s because the kit requires a swab sample collected from patients, and many health care facilities are running desperately low on the tools needed to safely collect those samples.
The Center for Disease Control issued guidance Tuesday that allows some patients to collect their own nasal swabs in health care facilities, in an effort to reduce the amount of protective equipment needed for health care workers.
On the opposite end, however, others note that fast and efficient testing can help medical professionals determine how much protective equipment they actually need to wear when interacting with a patient, as well as what kind of care to provide. Since this test can be done in a doctor’s office, it could even potentially help diagnose patients with mild or asymptomatic cases of the virus and help stop them from unknowingly spreading it.
Experts also say drastically increasing testing capacity can help get the economy back on track sooner. With increased testing, measures like keeping everyone at home could be replaced with more targeted identification and isolation of those infected.
EPA Limits Environmental Regulations During Coronavirus Crisis
- The U.S. Environmental Protection Agency announced Thursday that it is scaling back its enforcement of environmental rules during the coronavirus emergency as businesses face challenges like layoffs and accessibility issues.
- The temporary policy allows companies to monitor their own compliance with environmental laws, and the EPA said it will not issue penalties for violations of certain reporting requirements.
- Many critics slammed the move, arguing that it opens doors to excess pollution and does not prioritize the health and safety of people and wildlife.
- The EPA defended the policy, saying it has reserved its authorities for situations other than routine monitoring and reporting and will consider the pandemic’s impacts on a “case-to-case basis.”
The U.S. Environmental Protection Agency (EPA) says it will limit the enforcement of certain regulations as the coronavirus pandemic continues, leaving companies in charge of monitoring their own compliance with environmental laws.
The agency unveiled the temporary policy on Thursday, arguing that businesses are running into obstacles like layoffs and accessibility issues as the virus alters normal life across the nation.
“EPA is committed to protecting human health and the environment, but recognizes challenges resulting from efforts to protect workers and the public from COVID-19 may directly impact the ability of regulated facilities to meet all federal regulatory requirements,” EPA Administrator Andrew Wheeler said in a statement.
Under normal circumstances, companies must report when their facilities release a certain amount of pollution into the air or water. Now, that requirement will be put on hold for the time being.
“In general, the EPA does not expect to seek penalties for violations of routine compliance monitoring, integrity testing, sampling, laboratory analysis, training, and reporting or certification obligations in situations where the EPA agrees that Covid-19 was the cause of the noncompliance and the entity provides supporting documentation to the EPA upon request,” the policy states.
The agency also said it would exercise “discretion” in enforcing other environmental rules. It noted that the policy does not apply to criminal violations or hundreds of the country’s most toxic waste sites that fall under the Superfund act. The EPA also said it expects public water systems to maintain high standards.
“Public water systems have a heightened responsibility to protect public health because unsafe drinking water can lead to serious illnesses and access to clean water for drinking and handwashing is critical during the COVID-19 pandemic,” the policy says.
The memo said that the changes will apply retroactively beginning on March 13, with no set end date indicated.
Criticism of New Policy
Some, including people in the oil industry, had been asking for these regulations to be loosened, but others slammed the EPA’s choice, claiming it is too broad and lax.
Gina McCarthy, who headed the EPA under the Obama administration and is now president of the Natural Resources Defense Council, called the policy an “open license to pollute.”
Some called the changes “outrageous” and “evil,” accusing the EPA of prioritizing businesses over the health of individuals and wildlife.
Prominent figures in the climate change fight slammed the move as well.
“The EPA uses this global pandemic to create loopholes for destroying the environment,” teenage climate activist Greta Thunberg tweeted. “This is a schoolbook example for what we need to start looking out for.”
Others pointed out the irony of suspending rules that preserve air quality while a respiratory disease makes its rounds across the country.
“What part of, ‘air pollution increases our vulnerability to respiratory diseases LIKE CORONAVIRUS,’ is not clear, EPA?” one Twitter user wrote.
Defense of Policy
The EPA stood behind their move and did not agree with its classification as a dismissal of regulations.
“It is not a nationwide waiver of environmental rules,” Andrea Woods, an E.P.A. spokeswoman, told The New York Times. “For situations outside of routine monitoring and reporting, the agency has reserved its authorities and will take the pandemic into account on a case-by-case basis.”
Susan Parker Bodine, the EPA official who issued the policy, said that it does not excuse organizations from consequences if they do committ environmental violations.
“If you do have violations of your permit, you’re still obligated to meet your permit limits, you’re supposed to do everything possible,” Bodine told ABC. “And after the fact the agency will take that all into consideration but there isn’t a promise of no penalties in those kinds of situations.”
“If you have an acute risk, if you have an imminent threat … the facility has to come in and talk to their regulator, their authorized state or come into the agency,” she added. “And the reason for that is that we want to, we want to put all of our resources into keeping these facilities safe keeping communities safe.”