"Apocalyptic," "unprecedented shocks" and "a generation-defining moment" are just some of the terms that describe the economy and the labor market right now. Sadly, the news could get worse in the coming months.
In the three weeks ending April 4, a staggering 16.8 million Americans filed for unemployment, with millions likely to do the same over the next weeks and months. The Labor Department's March employment report showed that 701,000 jobs vanished, pushing up the number of unemployed people by 1.4 million to 7.1 million.
The unemployment rate jumped from a 50-year low of 3.5% to 4.4%, the largest month-over-month increase since January 1975, and the broader rate, which includes part-timers and those who are marginally attached, increased to 8.7%.
The March report, which snapped a record 113-month stretch of job creation, was far worse than expected, because most economists and analysts had believed that because the Labor Department accumulates data early in the month (March 8-14), the numbers would not yet demonstrate the gravity of the situation. They were wrong.
Here are some of the updates from the economists I follow and talk to regularly:
*The U.S. economy is likely to "lose more than twice as many jobs as we lost during the Great Recession during the first two months of this crisis alone. Unemployment will soar into the double digits. ...There is no scale to measure the misery associated with COVID-19 on all fronts," said Diane Swonk, chief economist of Grant Thornton.
*"We are just seeing the tip of the iceberg when it comes to the collapse of the labor market," said Joel Naroff of Naroff Economic Advisors.
*"This is more like 1929 and the 1930s, which hit the whole world," said Kenneth S. Rogoff, a professor of economics at Harvard University.
*This "is a generation-defining moment," said Mohamed El-Erian a chief economic adviser at Allianz.
*"Never in the history of the IMF have we witnessed the world economy come to a standstill," said Kristalina Georgieva, managing director of the International Monetary Fund.
*Coronavirus has delivered "unprecedented shocks to economies and labor markets. ... It is the worst global crisis since the Second World War," the International Labor Organization said.
Researchers at the Federal Reserve Bank of St. Louis outlined the dire situation, when they noted that of the nearly 165 million people in the civilian labor force, about 40% work in jobs "that are at high risk of layoff." Under a worst case scenario, that would result in 47 million unemployed and a staggering 32.1% unemployment rate.
While those numbers may be too high, plenty of other economists have predicted that the rate could spike to 15 to 20% due to the pandemic-induced recession, with estimates of job losses leaping into the tens of millions.
But a working paper that studied the 1918 flu pandemic, found that the tougher measures to curb the spread could help the economy over the long term.
"Somewhat surprisingly perhaps, we find that areas that acted early and aggressively with non- pharmaceutical interventions do not perform worse economically, at least in the medium term - if anything, they actually come out of the pandemic stronger," said Emil Verner, an MIT Sloan assistant professor and co-author of the paper.
Jill Schlesinger, CFP, is a CBS News business analyst. A former options trader and CIO of an investment advisory firm, she welcomes comments and questions at [email protected].