Worldwide coronavirus infections topped 1.5 million on Thursday, with the United States continuing to see surging numbers of infections and deaths as the federal government raced to blunt the impact on an economy that remains in near-total lockdown.
Markets have rallied on expectations that a grim week for U.S. COVID-19 cases will lead to an eventual plateauing.
However, the outbreak continues to devastate the country as stay-at-home orders shut down much of public life. The U.S. has now reported more than 430,000 cases and nearly 15,000 deaths; globally, the virus has killed over 90,000.
A stark reminder of the economy’s dire conditions came in the form of new weekly jobless claims, which surged by 6.6 million. All told, over 16 million people have filed unemployment claims in recent weeks, as extreme lockdowns across most of the 50 states keep businesses shuttered and consumers indoors.
JPMorgan Chase economists said on Thursday that “we continue to expect a horrendous few months of readings from traditional economic indicators, as we have already seen in claims for unemployment insurance, auto sales, and surveys of business and consumer sentiment.”
The Federal Reserve’s latest move to backstop the economy with a new $2.3 trillion stimulus plan dovetailed with the federal government’s multi-pronged rescue packages to boost small businesses and rescue cash-strapped consumers.
Yet the world’s largest economy is struggling to test and treat coronavirus cases, with the metropolitan New York and New Jersey region bearing the brunt of the virus’ onslaught. The Empire State — the nation’s epicenter of new infections — reported its grimmest day yet with 799 new fatalities, bringing the death total to more than 7,000 on over 81,000 cases.
Still, new hospitalizations dropped to just over 200 — the lowest since outbreak first gripped the state, according to Gov. Andrew Cuomo. On Thursday, he described the crisis as more traumatic than the September 11 terror attacks that destroyed the World Trade Center.
”9/11 was supposed to be the darkest day in New York for a generation,” he said.
Meanwhile New Jersey now has more than 50,000 cases and more than 1,700 deaths. But the rate of increasing cases has slowed, according to Gov. Phil Murphy.
As the focus shifts to containing the economic fallout, the Senate blocked a GOP-led proposal that would have provided $250 billion more in funding to battered small businesses. The surging jobless claim count has underscored the need to cushion a reeling economy.
“At this stage a 20% unemployment rate is no longer out of the question,” according to Paul Ashworth, chief US economist at Capital Economics. Meanwhile, Indeed Hiring Lab's director of economic research Nick Bunker, said the country is already near 10% unemployment.
“The pace and number of people claiming unemployment insurance are staggering and show no sign of slowing down,” he said.