‘A generation-defining moment’: Krugman, Roubini, El-Erian warn that the record 3.3 million unemployment claims are ‘just the start’

Paul Krugman won the Nobel Memorial Prize in Economic Sciences in 2008.

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Paul Krugman won the Nobel Memorial Prize in Economic Sciences in 2008.
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Reuters/Tim Shaffer
  • Claims for unemployment benefits soared to 3.28 million last week, more than four times the previous record of 700,000 set in 1982, Department of Labor data revealed on Thursday.
  • Economists Mohamed El-Erian, Nouriel Roubini, and Paul Krugman underscored the shocking increase and warned of further economic damage.
  • “Unfortunately it’s just the start, highlighting that we’re living through a generation-defining moment,” El-Erian tweeted.
  • “Bear in mind that at the absolute worst of the Great Recession we were losing 800,000 jobs *per month*. So this is at least an order of magnitude worse,” Krugman tweeted.
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Unemployment filings surged to 3.28 million last week, according to Department of Labor data released Thursday, as state and local governments locked down their populations and companies laid off workers in response to the relentless spread of the novel coronavirus.

The number of jobless claims was more than 11 times the figure a week earlier, and more than four times the previous record of about 700,000, set in 1982.

Leading economists said the dramatic rise dwarfed increases during previous crashes, and cautioned it could herald more pain to come.

The 3.28 million figure was a “huge spike” that is “indicative of the ferocity of the sudden stop hitting the US #economy,” tweeted Mohamed El-Erian, chief economic adviser at Allianz.

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“Unfortunately it’s just the start, highlighting that we’re living through a generation-defining moment,” he added.

The US faces a deeper recession than the global financial crisis of 2008, tweeted Nouriel Roubini, an economics professor nicknamed “Dr. Doom” for his pessimistic predictions. The question is whether the country will end up in a depression, he added, and the latest jobless number makes that prospect “more likely.”

Paul Krugman, a Nobel Memorial Prize-winning economist and New York Times columnist, was also deeply concerned about the unemployment claims.

“Not a surprise, but still an astonishing number,” he tweeted.

“Bear in mind that at the absolute worst of the Great Recession we were losing 800,000 jobs *per month*. So this is at least an order of magnitude worse,” Krugman continued in a second tweet.

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He added in a third tweet that the prospective $2 trillion stimulus bill, which Congress approved on Wednesday, won’t assuage the unusual economic fallout from the coronavirus.

“Will the stimulus bill help? Not much,” Krugman tweeted.

“This isn’t a conventional recession, it’s more like a medically induced coma; we want workers to stay home, and give them disaster relief, which is what the bill mostly does,” he added.