Published Friday, May 1, 2020 as an update to the post Visualizing the Unprecedented Speed and Size of Unemployment.
Unemployment numbers from the last two weeks are in. According to the department of labor, as reported by CBS, the week of April 18th saw 4.4 million claims, and the week of April 25th saw 3.8 million.
I went back to the data from the previous post and reran the numbers. To get a single-number comparison, I reran the numbers in six-week increments. This histogram shows unemployment from every six-week period from 1967 to the end of 2019.
The minimum is about 400,000 claims, the maximum 1,350,000 claims, and the mean 649,000 claims per six-week period. The standard deviation in the distribution is 180,000. Add in the last six weeks, which have seen 30,307,000 file for unemployment, and the histogram looks like this:
The data point from the last six weeks is so far above the rest of the distribution it’s nearly invisible (sorry for making you squint), so I painted it in.
That data point of the 30.3 million unemployed sits 164.3 standard deviations above the mean. And that’s not a typo. One hundred and sixty four point three standard deviations above the mean.
And if there were a line of the unemployed, everyone standing six feet apart, the line would be 34,439 miles long. It would stretch from Boston, to Seattle, to San Diego, to Miami, and back to Boston four times.
Economists anticipate three potential ways to recover from the current economic crisis, represented by the letters V, U, and L. The first would be a fast return to where we were economically before January. A U-shaped recovery is more gradual. An L-shaped recovery would be a slow return to economic normal.
I have no crystal ball, but given the unemployment numbers we’ve seen in the last six weeks, I anticipate something between a stretched U and an L-shaped recovery.