The speed at which people have applied for unemployment benefits in this country is unprecedented. I don’t use the word lightly. It’s applied too often to things that are remarkable or intriguing but that have also happened before, sometimes recently.
In this case, it fits.
More than 16.7 million Americans have signed up for weekly jobless payments in just three weeks. That’s never happened before, not even close, according to federal statistics. By this time next week, the number could climb above 21 million, the equivalent of everyone in Florida signing up in less than a month.
The numbers would be even higher if states with faltering benefit systems could keep up with the flood of applications. During the three-week period, Florida reported that about 472,000 people had signed up, or less than 5 percent of the labor force. The national average is closer to 10 percent.
The comparatively low figure doesn’t make sense in a state that relies heavily on two of the hardest hit jobs sectors — tourism and hospitality. It’s a good bet that Florida’s number will rise sharply over the next few weeks as it catches up to the national average.
Previously, the worst three-week stretch came during the 1982 recession when slightly more than 2 million Americans signed up for jobless benefits, according to data from the Federal Reserve Bank of St. Louis going back to 1967. At the height of the Great Recession, almost 2 million applied in a three-week period.
Two million vs. nearly 17 million: We’re running more than eight times ahead of those previous records. Even accounting for population growth the comparison isn’t close.
Big numbers can be hard to get our heads around. Thankfully the brainiacs at Edgeworth Analytics came up with a powerful analogy. They compared the spike in jobless claims to what a similar increase would feel like if the temperature outside diverged from normal in a similar way.
The formula included calculating standard deviations — a measure of the spread between numbers — but understanding the statistical gobbledygook isn’t important to get the point. They then applied that formula to the average U.S. temperature in March over the last 50 years, which is 43 degrees.
The result: March would get unbearably hot. The average temperature would hit 146 degrees.
What we are going through is an outlier among outliers, Edgeworth Analytics concluded. The numbers are so outside the range of our experience that it’s difficult to predict the effect on the economy, beyond the obvious fear and general disruption. We don’t have the usual road map.
Combating the coronavirus forced us to shut down the economy in a way we haven’t had to in the past, said John Johnson, an economist and Edgeworth’s chief executive officer. We won’t know the full extent of the consequences until we are well into the recovery phase.
“We have no historical anecdote,” he said. “There’s nothing that’s ever happened like this in our lifetime or even before our lifetimes. It’s exceptional.”
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