The Labor Department sent an email to state labor officials asking them to withhold precise figures on the number of unemployment claims in their states. Instead, the department said the states should use vague terms like “very high” or “large increase.”
The email was sent in the midst of an economic crisis that saw 281,000 Americans file for unemployment last week, a 33 percent increase from the week before. And Goldman Sachs reports that next week’s claims will be staggering.
But next week’s report is likely to be far worse, according to Goldman Sachs economists.
They predict the report will show 2.25 million Americans filed for their first week of unemployment benefits this week — eight times the number of people who filed last week and the highest level on record.
That estimate is based on news reports of an unprecedented surge in layoffs early in the week. Airlines, restaurants, hotels, sports events and retailers are all struggling to cope with a sudden drop in revenue, as people stay home to prevent the spread of the virus.
Even assuming a slowdown in claims later in the week, Goldman is not optimistic.
The Goldman Sachs economists noted that although it’s possible unemployment claims slowed down later in the week, even a conservative estimate suggests more than 1 million people filed initial jobless claims this week — more than the highest level on record of 695,000 in the week ending October 2, 1982.
Such numbers are scary, but not unexpected. So why ask state labor officials to not report the number of claims?
The email shared with the [New York] Times by a state governor’s office said that the financial markets closely monitor the unemployment reports, and therefore, should remain embargoed until the federal government releases its next numbers on March 26.
It’s not just for selfish political reasons that the Trump White House wants to put a lid on the bad unemployment news. A plunging stock market could so damage the economy that it would take decades to recover. It’s all about economic damage-control now and the stimulus, jawboning by Trump, and gagging state labor departments is all part of the effort to mitigate the disaster. It’s not going to go away. But the less damage that’s done now will make it easier when the economy starts to recover.
Whenever that happens, you can bet there’s going to be another stimulus bill, another trillion dollars.