Last week’s 3 million unemployment insurance claims is the capacity of the unemployment system to take in new claims. Initially, it was about 6 million per week in March, but the system is now busy servicing the initial 30 million claims filed through April and is now struggling to take in 3 million a week. People who were laid off weeks ago still have been unable to get their claims accepted.
The layoffs will continue at a 3 million per week steady state for another 10 weeks as businesses continue to shut down. Initially, we saw lower level jobs like restaurants close. We have seen over the past few weeks the supply system shutting down. Now we will see sourcing shut down. After that, bigger business layoffs are coming as things like airlines have shutdown because there is little business being transacted.
Over 30 million people are unemployed, and that number will easily reach 60 million within 60 days from now. That’s about 40% employment as there were about 155 million employed when this started.
Yet there are still idiots in here assuring people that this will be a V shaped recovery. It will take many years for unemployment to approach <5%.