Also Thursday, local and regional employers Honda and Henny Penny announced the suspension of production or plans to prolong such suspensions.
Economists are divided on what happens next.
There is hope that the downturn could be short-lived, some observers say. Others aren’t sure.
The nature of this episode suggests that the move down will be “steep but short,” said David Berson, Nationwide Mutual chief economist. Recent moves by the Federal Reserve and the aid package passed by the Senate — likely to be passed by the House and signed into law — are unprecedented in size, Berson said.
“As a result, if the coronavirus virus begins to subside by this summer, we should start to see improving economic statistics within a few months – followed by much stronger economic growth later this year,” Berson said.
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“As a result, if the coronavirus virus begins to subside by this summer, we should start to see improving economic statistics within a few months – followed by much stronger economic growth later this year,” Berson said.
PNC Bank economist Bill Adams said the duration of the downturn depends on how long it takes until the virus is controlled and how long until business and normal movement can resume.
If workers could return to work tomorrow, then, “The damage would be very limited. But the risk is that the longer large sectors of the economy are shut down, then the more income is lost by workers in those industries,” Adams said.
One of the factors in favor of the economy, Adams added, is that before the shut-down, it was strong. But reviving a “large complex economy” will take time, he cautioned.
People still want and need services they can’t get at the moment, he agreed.
“Sandwiches are still as good, people still want them,” Adams said. “We just can’t get them right now.”
Patrick Anderson, chief executive of Michigan-based market analysis firm Anderson Economic Group, sees some reason for optimism if the virus can be quickly controlled.
“Right now, I remain optimistic that we can have a severe downturn that we can endure for approximately three months and then get back to work,” Anderson said Thursday.
However, the course of the COVID-19 outbreak and the degree to which governments allow people to return to work and normal life “remain critical questions that are unresolved,” he said.
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Seasonally adjusted initial claims reached 3,283,000, an increase of 3,001,000 from the previous week’s revised level, the U.S. Department of Labor said Thursday.
Ohio claims also soared for the same week, with the Ohio Department of Job and Family Services reporting 187,780 initial jobless claims to U.S. Department of Labor.
A week earlier, the state had reported 7,042 claims.
The all-time high in Ohio for monthly (not weekly) claims stands at 205,159 in December 1981. The number Ohio reported Thursday was a weekly number.
“This marks the highest level of seasonally adjusted initial claims in the history of the seasonally adjusted series,” the U.S. Labor Department said. “The previous high was 695,000 in October of 1982.”
“The shocking number of unemployment claims this week underline the risk of a corona-depression. We estimated last week that 104 million workers would lose income in the next 45 days; a good number of them already have,” Anderson said.
The federal number nearly doubled what Wall Street economists had expected. Economists expected initial claims for the week ended March 21 to total 1.64 million, Bloomberg news service said. That number itself would have easily marked a record.
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Also Thursday: Honda, one of Ohio's and the Dayton-Springfield region's biggest employers, said it will extend the suspension of vehicle production until April 7.
Eaton food service equipment manufacturer Henny Penny also said it was suspending production for two weeks, until April 6.
“As the market impact of the fast-changing COVID-19 situation continues to evolve, Honda will evaluate conditions and make additional adjustments as necessary,” the automaker said. “In undertaking this production adjustment, Honda is continuing to manage its business carefully through a measured approach to sales that aligns production with market demand.”
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