The former head of the Federal Reserve, Janet Yellen, states she believes that if there was a real-time unemployment rate, we are probably sitting around 13% right now.
That is astounding. The unemployment rate in February was 3.8%. In a matter of about a month, it is now around 13%. This is…catastrophic.
This number will only climb higher the longer the Stay at Home orders remain in effect and businesses are forced to stay closed.
Yellen described the recent reports of initial claims for unemployment benefits, amounting to around 10 million in the past two weeks, as “absolutely shocking.” Claims for unemployment benefits are one of the few ‘real time’ pieces of data the government produces on the economy, showing new claims for the prior weeks. Most other data require weeks or months to be put together.
“If we had a timely unemployment measure, probably the unemployment rate would be 12 or 13 percent at this point. And moving higher,” Yellen said Monday morning in an interview on CNBC.
Yellen said that the economy would likely decline by “at least 30 percent” in the second quarter, an estimate in line with what economists at many banks and other economic forecasters have recently predicted.
“This is a huge, unprecedented, devastating hit,” Yellen said. “My hope is that we will get back to business as quickly as possible.”
There’s been a lot of this saying floating around the internet: “You are not stuck at home, you are safe at home”.
This is cutesy and I get it, but it’s a bit too simplistic. It does not recognize the real mental and economic anguish this shutdown is causing people.
President Trump keeps indicating he is very concerned about the economy.
WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF. AT THE END OF THE 15 DAY PERIOD, WE WILL MAKE A DECISION AS TO WHICH WAY WE WANT TO GO!
— Donald J. Trump (@realDonaldTrump) March 23, 2020
He has repeated the sentiment he voiced in this March 22nd tweet many times. The cure cannot be worse than the virus problem itself. However, it seems we are well on our way to just that happening!
President Trump has mulled setting up a second coronavirus task force aimed at figuring out how to reopen the economy.
This task force needs to be assembled quickly and begin their work immediately.
Watch the full CNBC interview of Janet Yellen below.
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