It will be a devastating week for the US economy. There is no playbook — and stimulus must come fast
Consider Tuesday morning’s consumer confidence report a bit of nostalgia. It will likely show consumers’ confidence commensurate with a healthy economy.
Friday’s monthly jobs report will barely begin to reflect the devastating fallout in the jobs market. (Possibly the first month of net jobs losses in a decade, but not the earthquake the weekly data are showing.) The survey period was the second week in March, a time when Americans were just waking up to the threat of the virus and social distancing had not yet been implemented.
This week will probably show millions more layoffs. Moody’s Analytics chief economist forecasts another 4.5 million first-time filings for jobless benefits this week, which would be the highest in history.
And it can’t end there. Rather than an actual “stimulus,” this record-setting effort is simply a life-preserver to keep Americans afloat. If done right, it may stop the losses. But more stimulus will have to come later, with more Congressional spending expected and lawmakers signaling they are willing.
Meantime economists have no playbook here for the damage done to the economy.
The violence of those moves reflects how unprecedented this automatic shut-off of the economy is. And the vast uncertainty of how — and when — it will restart.