FiveThirtyEight Politics Podcast: COVID-19 broke the jobless claims chart

Economics reporter Ben Casselman joins the podcast to discuss the stunning unemployment claims numbers from last week.
36:06 | 03/27/20

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Transcript for FiveThirtyEight Politics Podcast: COVID-19 broke the jobless claims chart
Hello and welcome to defy identity politics podcast I'm dealing group today we got some of our first nationwide data about the extent of the economic damage caused by the coroner. 3.3. Million people filed for unemployment benefits last week. And that is by far the highest number of weekly claims since the government started keeping track of this. 1967. In fact it almost five times the record of 695000. People from nineteen EDT. To put that into some perspective as well just three weeks ago. Weekly jobless claims historically low at just 200000. To 200000 to 3.3 million in three weeks if you seen the chart of these numbers it's absolutely stunning on our website. It all over the Internet. So we're gonna try to put the 3.3 million number in contacts. And ask what the future of books what the political effects could be and how our politicians are trying to address the problem. So here at me to discuss our senior writer at nearly Thompson devout who's covering economic consequences of the corona virus at 538. And oh yeah. Altering or that's is Ben councilman who covers economics and business at the New York Times. Longtime listeners may remember Ben as he used to be 538 chief economic rhetoric a bad welcome back. 527. Signs forty. With a backpack that. And let me back. Love the humor it only tech you know an economic collapse to get you back on when at 538. I'm glad to have you here. So bad what's your initial reaction to you these numbers is it in line with what you expected. And I think it's fairly in line with what I expected and what most economists expected but I don't want to lose sight of just how old. Unbelievable. These numbers bar and you use cited those numbers at the top here. But I need to be talking about millions of people filing in one week. You know this this was the equivalent of and one week wiping out the past year and half of job gains. I'm humans is gonna had a couple points the unemployment rate right here meaning it is just like almost scale that we have never seen before. Yeah and Ilya so what are these numbers not quite showing. Like what's happened over. The past couple weeks that isn't priced into these weekly jobs. That right that's the attic and it's kind of unbelievable about these numbers is there are people who have lost their jobs who are left out this so. They're the people who lost their jobs last week and haven't actually people to file their clean yet because there's been reports I've talked to several people have been affected by it is. Just crashed web states. Jammed phone lines just people unable to get through to unemployment offices calling over and over and over again and still can't get their claim and so some of those people are almost certainly not captured Ian and Steve apps from last week. And then there are a whole sort of classes of workers to arch traditionally not eligible for unemployment insurance so. Independent contractors. Are peak one generally can't get out of employment insurance and obviously that's one of the groups of people. Where they're work may have dried up considerably and city Amy really hurting. And we just don't see activity and there are some other workers I'm. Part time workers some part time workers don't Pollock I. Tipped workers our often down wears and don't qualify because it count me money to meet that threshold. So I'm. You know it's sort it. It's stunning both to look at these numbers he kind of blown away by how huge they are and then realized they're not eaten capturing everyone who's in the situation. Great should we expect. Next week. Reflecting this week's jobless claims to be any different as is just the beginning. Yeah it is just the beginning we we could easily see these numbers again next week problem and and you'll continue to see. In a peak numbers for a while now. It is worth noting that some of those groups that on the namely an addition. Will qualify for benefits under the package that has passed the senate and and looks like it's on the way to act passed in congress are very shortly. So that would extend benefits to a lot of the people and left out but I mean that that that doesn't change the fact that those people captured these numbers. So it could be captured in future jobless claims numbers. So it's just another reason to expect that these numbers are bigger and bigger act we'll talk more out that the deal that congress. But that's expanding eligibility. Hand. Eight or plane and out. And. Where our overall unemployment levels headed. Bet you mentioned that this could meet unemployment rates right now tick up a couple points. What are economists saying about how Pappas could catch. There's almost no question that were we're gonna get two to 10% which is the highest level that we saw in the last recession. I'm but I'm hearing plenty of people suggesting that an unemployment could hit 20% could hit 30% I mean these levels that we've. Really never seen outside of the great depression and some of the numbers in a week we've talked for years without you know since the Great Recession. Of 20082009. The you know we're now talking about numbers I'm not just on jobs but on GPM on things that that you know the only experienced it happened in this country. Is is the great. You should. Yes I mean this is just the start of the data that's going to be coming out I imagine it's the first nationwide picture re really half of the damage so far what other numbers are you going to be looking in order to judge. The consequences of the corona virus. Meanwhile the challenges is that we're we're not gonna get very much good data for one Ohio. You know next week we get the monthly jobs report which you know you won't know I'm I'm a huge fan of this month is not gonna capture very much of this its side the data was collected. In the second week of march which is before the worst of this. Aren't you know what we're gonna get some some numbers on retail sales it will start to show this we're gonna you know eventually we'll we'll see it in things like GDP. But you know we're kind of flying blind here for a while in terms of the real impact. This is just faster than economic data can keep up. Yes and Ilya that. Kind of oftentimes reach shy away from music anecdotes in order to describe the situation on the ground. But we're relying on other sources of data like we talked about last week. Opentable wore the number of people in this two reits or. Or restaurant reservations flights things like that you know you've been talking to a lot of people have been directly impacted by this what's the theme Dorsey on the ground. I mean. I've seen honestly just a lot anxiety and confusion. And the year in talking to people and one of the things that's really struck me on just in the folks that reached out to Meehan that I've spoken. Is this or that rat of what's happening I think that a lot of the focus for good reason has been on sectors plate and the service industry restaurants Taurus. That are functional being shot down. But there are small many parts of our economy that rely on in person inner action we don't even think it out. I was talking to a woman yesterday as occupational therapist. And she was saying basically I thought my job was recession because people are always going in the service that I side. But I literally cannot do you might shop without getting. You know I have to be within six inches of people attacked like six feet forget it knocked in a work and she was laid off. And she works in the health care industry and it's you know I think even with industry overall you'd think at this moment lot of demand for people. I am people are hurting in all kinds of ways and in ways that are some kinds. Perry expected to them so they might not be prepared financially. And then of course it also heating I am parts of the population at least prepared to wapner. A recession so this is hitting low wage workers. Especially. Jobs tents and each built by women of color single mothers really hard. And so that's another thing you know I think years. There's a lot of questions about how the government stepped in and help people but also heard a lot of questions from people out whether even that hell. Will be enough because one of the things that's scaring people question. Alan ago hotline at eight and. Kind of an odd thing it's happening today in that it. The stock market has been rising throughout the day despite these numbers and you know we all seem a rising because. Of this expected to trillion dollar stimulus package that's gonna be on the president's desk probably by the weekend. So. Ben how much should we pay attention to the stock market. To judge the health of the economy relative to these other data points like jobless claims. About in order it in order to judge like the lived experience of the economy. Yeah I would pay almost no attention to the stock market column. You know most Americans don't have stock outside of retirement accounts. It's is not a good indicator of how people are giving overall. I think paying attention the financial markets more broadly makes a certain sense. You know those of us who are out with this kind of thing pay attention to took on spreads and various kinds can be an indicator. How will all the financial system is actually functioning in an easy important for the financial system to function right now. So that businesses are able to stay in business businesses that aren't being wiped out by the virus directly we don't want them to fail because the financial system seizing up. But you know we're going to be looking for evidence in the real economy and sort of how this is actually playing in terms of jobs and incomes. I do think it's important to note that the the package we'll talk more and shore and out the details about it but couldn't really pretty substantial impact on. On people's lives. Right you know we're we're talking about people losing their jobs. Arm. This isn't an unusual situation where. You know the goal here is not for everybody to get back to work tomorrow we don't want people. To go back to work tomorrow we want people to stay home on but we want to make sure that when they stay home. They're able to continue to put food on the table and they're able to hold on to their homes. We want businesses to be able to to stay in business enough that they can open back up which be it through this. As the question is that sort of a traditional. Stimulus. Where. You know how we get people to go out in Spain and the question is how do we make sure that people are still. You know. Why in the end and you know financially. Relatively healthy once they handled it happens and that that's a very different question. Yet last week a million and I spoke win an economist Terence Sinclair. And we asked whether there was any question about whether we were in our recession and she said but it's hard to describe what exactly is happening because it's never happened before. This and you know the standard definition of work of a recession is when GDP falls for two consecutive quarters now borer just at the very beginning of this. But eased a recession kind of the only possibility at this point. I don't think there's any question that we are going to have. Something that meets the technical definition such. I'm but I am not sure that a recession he is the best. Framework for thinking. This from a policy perspective or from understanding the economy. Write this he's not a case where. Some part of the economy out of control and you know we kind of needed it to two. Reset itself in some way you know we didn't have a housing bubble. Dot com bubble or anything like. I'm and is not a situation again where we need people to rush out and and spend try to get economy going again. Somebody described it to me he died yesterday. Eyes that we need to put this economy unit medically induced coma. You need to us we need to halls earnings for a period so that they and you can pick back I'll quickly. And and hopefully be in the best shape possible once we come back that's a very different circumstance from what we traditionally think ash. Yet and the you're. Kind of asking the question. About how long. Could this last and people being worried about how long they're gonna have to make provisions for being out of work. You know I think there is a lot of variance in terms of the projections that epidemiologist health experts doubt. Ben from the economic perspective. Obviously people who. Work on Wall Street people who were crunching these numbers are making their own projections are how long they think it's going to last. What does that picture look like from an economist perspective. We hear a lot of economists who were playing epidemiologist right now my general advice would be to ignore all of their attempts to do so there are these geologists for a reason economists love to think they can you know. Make every kind of model better than anybody else but it's not true there better models not much else. You know I think of how long can I asked question from an economic standpoint. Depends Donald so heavily. On the policy. It you. This infusion me a scenario here right where. We would beef up the unemployment system and you know take other steps in such a way that everybody who's out of work right now. Yes they're normal income how many. I'm in that scenario. You could continue people continue to pay their rent they could continue to put food on the table they continue to kid you know meet their financial obligations. Is gonna cost the government a lot of money and we can talk about what the implications of that are you could imagine we could come out the other side of this and you know people could go back and resume their jobs in resumed error there daily lives. If they don't get. Then we know that a very large percentage of people have very little financial cushion and they're gonna get into trouble very very quickly. Eds or you're talking about kind of how unemployment spirals into. You know a lot of bankruptcies defaults on houses like things like dots what's spirals when you get high levels of unemployment. He wants people so I mean imagine all these people who work in restaurants and working directly affected sectors they all lose their jobs. If they don't happening calm and don't get enough help to tentative support them. Then they're not from illness and money and now all of a sudden all of those sectors that are relatively insulated from this. There are insulated anymore right you can't keep your Netflix subscription because. You don't have a job anymore you can't keep you know buying food because you have a job in more and then that spirals through the economy. And and then you can imagine right even when we come out of this of the health crisis portion of this. From all those businesses that have failed all those people who have lost homes that the banks that have that a failed as a result. You know all of that comes on much harder to restart and and then you get a recovery looks much more grinding and much. I think the point. And is that all of it is connected the policy response is connected to health crisis is connected to our ability to reach out economically and it's really hard to untangle and Ian state right now. Because our ability to contain iris is also going to act and act. It's. Odd couple economists at next to me if we need to meet eventually the economy to restart down the road people go out. Out an. And if people don't feel that he can do acts eat eat. If we don't feel that the pirates had it contained it still worries about going outside and these beings into the wanted that act on the harder it will be for our economy to return to arm. And so I think. There's a sense and yes the economic situation rate now looks pretty high year. By as long as we can keep people floats. And tried sorted. Freeze our economy in Hamburg you know whatever metaphor. You lose four. Wing and the public health crisis has diminished when where eight people. Yes okay. It's a tribute to go back to your chopped. And those are in its 88888. And it it's a pretty painful opt. By saying and it's one use policy to rats and makes her pupils happen or eat too wet. Yeah and and I'm really just there's that element is something that I Jerome Powell the Fed Chairman has stand said this morning on television news center repeatedly. Is you know this is first and foremost health crisis. Right this is not 200789. Was an economic and financial crisis and we have to fight it. This is a health crisis first and there's nothing that we can do to solve the economic crisis until we can address. Yet president trump has expressed impatience over the economic consequences of our response to run a virus which I'm sure westerners have heard. He said he wants to get things back up and running by Easter which as April 12. As you've mention. Health experts doctors doctor algae and economists such as Jerome Powell say that. That's like not really how things work the process could take much longer and that the health consequences need QB dealt with first. Have I did you encountered economists who say. No this is just not worth. The consequences and in people need to get back out and we need to open things up almost almost regardless is is there anybody in the economist community who is on the same page as the president in terms of that kind of timeline. Here we you've heard and I talked to some folks who feel. I don't think anyone is saying let's go completely reopen the economy go back to normal on April 12. I have talked to some people lips said. You know the idea that he shut downs will continue sorted indefinitely. That that's worrying that and they want this to continue. In a sort of more targeted way. I think the issue is and what I've heard from from other economists use net. You know me be we could've had a more targeted approach if we had planned better. For asked if we had been testing and surveillance infrastructure that we needed to it. Make something you know dude do you what's not Korea edited. For example but we're not at that point and so you know we missed the boat basically we mr. that we can't go back in time fix that. And so now. You know yes he couldn't say in theory we could happen more targeted approach week it happen you know certain people going back to work meaty but it. We're just not at a point realistic more and curious what you've heard from books that. Yeah I mean that's pretty consistently what I've heard there are certainly some economists who argue that the you know this shot down is sort of going too far or worry it will go too far from last very long most of those economists are frankly people who have. Work in this White House are still work in this White House I think the challenge here is. Is back to the the issue of the epidemiology of this if if reason people back to work before we have cracked the health problem. And we're just gonna re infect a whole bunch of people and we're going to be right back where we are now except mine yes. The confidence. Of the public that that anybody knows what they're doing so obvious idea that it is I either me. Health crisis or an economic crisis and we have to sort of balance the two I think sort of misses. The real point here. Which is that this is a health crisis to matter Awad. Com is an economic crisis no matter won it and we have to solve the two of them together. You can't you can't repair. The other thing net I just add to that is I'm you know I think the response that it. Heard from the president from other people were seen it seemed eager to reopen in the economy seems to assume that the economic damage. Ease the result of that response. And not. And the economy was already you know people were already not flying on airplanes before states start shouting now. We start reopening piecemeal way. That doesn't. You know people so stay home state governor. State shut down so this idea that you concerted. And was saying somehow separate. Response from health reality right now. It is just it's. I want to move on and talk a little bit of bow. Stimulus package or you know there's a debate over rapper to call it a stimulus package even. But just a final point on this and a you've been talking to a lot of people who've been affected. By day their corona virus from an economic standpoint. What's the debt they're view I mean our date kind of frustrated and want the economy to open back up or is there a general understanding that this is just how things. It to work for. I have not talked to a single worker do. Wants to go back to work rate. I talked to a lot of people where feeling extremely. Financially secure. And it really worried about how they're going to keep your rent. And I haven't talked to anyone who gets you know I think I'd be to go back to opt. I'm much more sense. This is what we have to do right now and I might you my personal financial situation I might be looking for help from the government. By I am you know I. At least among the people are there there's a pretty broad sense that this. I will say and I talk to problem. It. As well to a number of people most of them I I think it have on the missing category but I I have talked to a couple of people who have lost their jobs and think this is all. A total overreaction that they would love to go. Back to work tomorrow arm. You know I think we've heard a certain amount of the skepticism in. Particularly conservative media over it is the severity of this and and that is certainly reaching. Are reaching some some workers writing that is a view that exists out. We didn't surprise I was expecting to a encounter a lot more. And you know certainly does what happens when you talk to a handful of people on don't you don't get the most represented hidden. Sample but that I don't know I mean then have you been surprised by. You know I guess. Britain how how how broadly were you expecting attribute it secret because I have personally surprised. By how few people had seems sort. Disgruntled about the facts. Eight lost their job. Yes and it's certainly. A lot of circumstances surrounding it but I am not necessarily meaning that shocked. You know I think that's a good point I mean that the first wave of layoffs here on has really hit it. From my definition the war Kurds who world. Most in contact with people right whether that's that's. You know servers or retail workers or horror. You know people who travel at all sorts of different jobs in which people encounter a lot of people. As he is not all that surprising that those people. Who were particularly concerned about the idea of going to work and being exposed to strangers all day. Is relatively easy if you've got a white collar job and you're working from home right now to say oh this is all stupid and overblown. If you're facing. You know going up and and you know being six inches away from. You know dozens or hundreds of strangers over the course of the day you might think about the different. All right so Woolsey how the assault progresses as it reaches over parts of the economy. As well but let's turn cues that two trillion dollar package that was passed late last night Wednesday night Ian the senate. How does it go about trying to stem the economic damage and is it likely to be effective from what we can talent that's point. Yes this is packaged as a lot of things this is two trillion dollars obviously and I don't think we've got to wanna go through each of each of those dollars individually I would but Ohio a few things that it it down is problem. You know people paid a lot of attention to these these direct payments to people 1210000. Dollars per adult five dollars per child. I'm four for for most family is. You know that's a pretty meaningful odds stimulus that its larger than anything we saw in the Great Recession. I'm asking for a lot of money in in people's pockets it's on one's crying payments and humor a lot of people sort of saying you know that's not give me. That much good if I'd gone in and coming do you every month. But that's probably pretty helpful for getting people through. Rent or mortgage payment this month or at least once that check actually comes through it's going to be a couple of weeks. Hong the unemployment piece of this I actually think is probably the single most significant thing. To really big things there. They're broadening the did it as a we discussed earlier work and it's broadening significantly who's eligible so we extends to a lot of gave workers a lot of independent contractors. A lot of part time workers people who made have been covered in the past. And it's adding 600 dollars. A week on to every single one of those check. So if you think about it if you want to thousand dollars a week right around 50000 dollars a year. You are probably getting it would normally get 30400 dollars depending on where you live in an unemployment check. This is now gonna take you up to 900000 dollars to replace most of what you were missing out. So you know to our earlier pointed out you know how we sort of I went to New Orleans and algae to freeze the economy amber so that we can bring it back. It is actually conceivably could do pretty important been pretty important step in that direction. I'm and then of course is a lot of money here that's going to. Helping businesses in various ways that's going to be controversial. You know did the B word bailout is gonna get thrown around. On and we can certainly talk about that's more I think one thing that is worth highlighting there. It has a very good reason to want to ensure. That most businesses. Are able to in some form stay in business through this you know we don't want to whenever his hands and in two months three months or six months or whenever it is. We don't want to need to sort of star entire economy over again. You know to have the new new restaurants starting up to replace the old ones right as much as possible we would like. Basically healthy businesses to survive this and and so that's one of the things that the deal. Right and I know one of the things in the bill also is trying to incentivize businesses to actually keep people on key roles because that's one thing that I have heard a lot of concern out is that people are being laid off. And it talked to some business owners who have said. You know I laid off Michael staff because I thought it was the most ethical thing to do because then they can easily applied for unemployment insurance. And I talked with the best health am. But that means it you know even if that employer has the intention of rehiring. People whenever EU's that they are able to reopen. Severing that relationship just adds though earlier difficulty in getting workers back on the job and working again and you can imagine it. You know inevitably. Be able to rehire all of pan. Especially in the industry's accurately Ike Turner currently the service industry. And so that's part of it to you I am trying to help them. Businesses bear the financial cost. At keeping people on all there's also a rescue component for hospitals. I'm which is something it is really important and on this medical system seems to be in need for obvious reasons right now. I'm a piece of aesthetic and invest in more telemedicine. Which is going to be important for the parts and health care to inspect its ocean. Two. More telemedicine. Focus on an adult help answer hopefully that people are people's. Continued seek acts on health care services. While. In her home. So I think there's there are two important piece. Should we expect further government intervention here or is this. Designed to get us through the bulk of what we're facing. Most economists I talk to you saying this is a down payment it's important don't payment I think it's surely are significant that congress. Has moved quickly. To me this is a really big number problem. That they put together pretty quickly. I'm but I think most economists would would say that they're still need to be more they are if this goes on mean you can certainly imagine eating more checks. I would say that the one real piece of this that really seems still to be missing. In talking to people is the is a state local government piece of this. The interstate and local governments are are getting hit from both directions right now they're seeing a total collapse in tax revenue right if you think about. Sales tax income taxes right all of that's been taking huge hand. And I had enormous expenses and if you think about what's happening in in Seattle and Washington State right now what's happening in New York. They're just huge expenses and there's been very little and so far to hope those states. Armed the state government should mean real trouble. And you know state governments unlike the federal government generally have to balance their budgets which means that if they end up. In a deficit situation. They are after raise taxes would be cut or may have to cut programs. Which is exactly what you don't want them to do so is asking to be the big hole in in this bill is partly to get filled. Yet looking at Venice. From kind of equals Stan Korea countries across the world right now our meetings similar measures with unprecedented price tag right as is more than doubled. Stimulus package from 2009. From America's prospective. Are there downsides to a whole bunch of countries around the globe taking on unprecedented amount of debts all at one time. You know there's definitely going to be a point at which there is some sort of reckoning here on the on the government's. Spending side. But I think you know we're we're quite clearly not there right now we certainly from the US perspective. The government can borrow money right now practically for free. And so you know what that then that markets are saying is spend spend spend borrow borrow or do what you have to do. I'm that's a more complicated story in you know many other parts of the world certainly including. You know parts of Europe. That were already in in very give him more challenging fiscal situation. But you know tour earlier point about this being health care crisis. You know it doesn't mean none of this makes any difference if we don't get the health care crisis under control and so. You know I think what we're seeing from governments around the world is is you have to spend money now figure how to deal with the consequences. A minute there to wrap things up here. What has the political process of all of this been like it seems you don't from the perspective of people who have been. Following Washington and politicians on this podcast for over four years now the seems to have happen remarkably quickly. What happened what had happened in order to get there. Yeah I think it has quite past that does not mean net net there was no fighting there was quite a lot of thinking. In congress to get to this point. In the initial Kirk is. Solution that senate Republicans. Brought out a week ago looked quite different. Aunt at a price tag then let me rate now. I mean you know I think the situation. Year. Necessity. Forced people to move more quickly that I think your political. Instincts. Would. Happy where it gets there they're Saturday. Political goals would and it indicated it other elements. Already there are concerns about whether this money going to get to people asked not. You know. Businesses. Asked. And I think their acts. It was going to be cast. In the government to quickly it's though. Even then there were disagreements. Are definitely people on both sides. Are happy. With parts and packaged. There seems to be a recognition. Among folks. At the act together. Our it. Well let's leave things bear thank you so much banned for joining us today a bit of a throwback Thursday. Hope you. Enjoyed being back on with 538. If only for brief moment. I look forward to joining you to discuss the stunning and successful recovery. Counselor and I'm you know entertainer and. And it really a figures while Alon. My name is due hundred attorney chow is in the virtual control room you can get in touch by emailing us at podcast at 538 dot com you can also courts treated us with questions or comments. If you're a fan of the show beavis or reading or review in the apple pod cast or. Or tell someone about us can also subscribe to us and YouTube. Thanks for listening animals. Yeah. Yeah. I.

This transcript has been automatically generated and may not be 100% accurate.

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