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Fed Points To Human And Economic Suffering Caused By COVID-19

May 14, 2020
Originally published on May 14, 2020 6:29 am
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STEVE INSKEEP, HOST:

We have another damage report this morning. The government reported how many Americans filed for unemployment for the first time last week, a number that has been in the millions week after week. NPR's Jim Zarroli is covering this. Hi there, Jim.

JIM ZARROLI, BYLINE: Good morning.

INSKEEP: What are the latest numbers?

ZARROLI: Well, nearly 3 million people filed for unemployment benefits last week. That brings the total number of people who've lost jobs since the lockdowns began to a staggering 36 1/2 million people. In other words, a fifth of the American workforce has filed for benefits. The numbers have been steadily going down every week. But when you have millions of people losing their jobs every week, these are just abnormally high numbers. Now, a lot of people are on furlough. They expect to be called back to work. The question is when and how that will happen. Nobody knows. We're seeing some re-opening of businesses but - businesses like restaurants. But it's often restricted in some states to, say, 25% or 50% capacity. So that limits the number of people who are getting called back.

INSKEEP: Yeah. What do the numbers show about who is losing their jobs?

ZARROLI: Well, we've already known that the layoffs are disproportionately affecting African Americans and especially Latinos; also affecting people at the lower end of the income scale. The Federal Reserve says 40% of the households earning $40,000 a year or less experienced a layoff in February. The largest increases last week were in Oklahoma and Maryland. There were also states where the number of claims fell. We don't know the reason, but some of these are states like Alabama and Florida that have been among the first to reopen their economies.

INSKEEP: Now, I know that even before these numbers became public, the chairman of the Federal Reserve was making it clear that he was very concerned about the direction of the economy. What has Jerome Powell been saying?

ZARROLI: Yeah. He talked about this yesterday. He gave a speech remotely, of course, to the Peterson Institute for International Economics. It was a pretty dire speech about where the economy is going. He said, we are at risk of a lasting downturn.

(SOUNDBITE OF ARCHIVED RECORDING)

JEROME POWELL: The scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II.

ZARROLI: He also said the path ahead is both highly uncertain and subject to significant downside risk. You know, like every Fed chair, Powell chooses his words carefully. So this was, by Fed standards, a pretty forceful and direct speech.

INSKEEP: Why issue this warning now that it could be, not that it will be but it could be a lengthy downturn?

ZARROLI: Well, I think he was really just trying to underscore how unprecedented and uncertain the economic picture is right now. He clearly wants Congress to do more to try to prop up the economy. Really, ever since March, the Fed has been just pulling out all the stops to keep the economy going. It's been doing things it's never done before like lending money to everything from big cities to small businesses. But I think Powell realizes that the Fed can't do it alone. It needs Congress to do more. And right now, Congress is divided over whether to approve another big rescue package. Powell says that will be expensive, but it will be worth it if it helps the United States avoid long-term economic damage and leaves it with a stronger recovery.

INSKEEP: Jim, thanks for the update.

ZARROLI: You're welcome.

INSKEEP: NPR's Jim Zarroli. Transcript provided by NPR, Copyright NPR.