by Robert Hughes
The American Institute for Economic Research
The policy-induced recession that began in February may already have ended but the devastating impact of government shutdown policies are likely to linger for many quarters. There are growing signs that the path towards reopening of the economy is setting the stage for growth, but significant risks remain.
For the labor market, initial claims for unemployment insurance totaled 1.31 million for the week ending July 4 (though holidays can distort the numbers), marking the sixteenth consecutive week of historically massive layoffs following the implementation of business and consumer lockdowns intended to fight the COVID-19 pandemic (see chart). However, claims have slowed for the fourteenth straight week after registering 6.87 million for the week ending March 28 and have been below 1.5 million for three consecutive weeks. Claims in the millions are still extremely high by historical comparison but the downward trend is a positive sign. Still, the 16-week total of 50 million is devastating.