Day after day, evidence and digital data are emerging that show the extent to which the global economy is being crushed by coronavirus blockages.
Today, several particularly convincing examples of the pandemic impact.
The United States Department of Labor has revealed that, in the seven days that have passed since last Saturday, 4.427 million more Americans have declared themselves unemployed.
That brings the total number in the past five weeks to a barely credible number of 26.5 million – about a million more than the total population of Australia.
Expressed as a share of the total labor force in the United States, this means that one in six working-age Americans who are still able to work has filed for unemployment benefits in the past month.
Or put another way, it means that the equivalent of all American jobs created since the end of the global financial crisis in 2009 – the longest period of job creation in American history – has been wiped out.
The figures also highlighted the really shocking unemployment rates in some American states.
Unemployment in Michigan, whose largest city, Detroit, has traditionally been the heart of US auto manufacturing, is now 17.4%.
In Rhode Island, another traditional manufacturing base but also home to the health giant CVS, the unemployment rate is now 15%.
In Nevada, home to America’s most famous casinos, the unemployment rate is now 13.7%.
And in Georgia, where household names such as Coca-Cola, Honeywell and UPS are headquartered worldwide, the unemployment rate is now 13.6%.
In five weeks, in absolute terms, the most jobs were lost in California, Pennsylvania and New York.
Expressed in terms of the proportion of the local labor force, Pennsylvania and Georgia were the most affected.
The destruction of American jobs in the past month is without parallel.
To put it in context, during the financial crisis from 2007 to 2009, approximately nine million Americans were laid off.
And the numbers may be even worse than these numbers suggest.
The extent to which unemployment increases are recorded depends on the efficiency with which each state is able to process unemployment claims.
For example, a sharp increase in the unemployment rate in Washington State has been attributed to a systems upgrade that has made it possible to process claims faster.
What is particularly concerning – and which will no doubt concern President Trump as he prepares for the November elections – is that the increase in unemployment in the United States appears to be even greater than in some comparable economies.
As James McCann, senior global economist at fund manager Aberdeen Standard Investments, said, “This is another terrible week for layoffs.
“One of the concerns is that government support does not seem to be stopping the wave here.
“The scale of unemployment in the United States is clearly greater than in other economies.
“This is partly due to the flexibility of the labor market, but also indicative of the problems the United States has had in ensuring that companies keep their workers like other countries have done with wage subsidies. “
An increase in unemployment is perhaps the most obvious way to illustrate how an economy is slowing down and certainly in terms of defining the human suffering that an economic downturn can cause.
Another way to measure a slowdown – and, for economists, just as important – is in the form of survey data from the purchasing managers’ index.
It is a monthly overview of activity in three specific sectors of the economy: services, manufacturing and construction.
Financial data providers IHS Markit compile the figures by sending out questionnaires to thousands of business leaders each month asking questions about what they see in certain parts of their business, such as new orders, hiring levels, prices, etc.
These responses are then summarized in a single digit.
Anything above 50 represents growth and anything below 50 represents contraction – and the numbers are usually a very precise guide to how the official GDP figures, which will be released later, will look .
Today, IHS Markit released “flash” PMIs for April, which are compiled from 85% of the responses, for a number of economies.
These too were really terrible.
The composite flash number – which combines both services and manufacturing – for the United States was 27.4.
It was down from 40.9 in March.
Meanwhile, the numbers in Europe were even worse.
The composite number for the euro area was 13.5, again the lowest ever, compared to 29.7 in March.
Inside that, some of the numbers were even worse, with the PMI composite figure for France – which saw the fourth highest total coronavirus deaths by country – standing at just 11.2.
In the UK, the figure was 12.9, down from 36 for the month of March.
Again, this is an unparalleled figure, consistent – according to IHS Markit – with a quarterly contraction in GDP of 7%.
The overall health of the economy may actually be even worse than what the PMI figures suggest because, as IHS Markit pointed out, the PMI survey excludes the vast majority of the self-employed and parts of the sales sector. retail strongly affected.
Cathal Kennedy, European economist at RBC Capital Markets, said: “Even given the record drop in the PMI survey in the past two months, the surveys still fail to detect the true extent of the collapse of the activity that is happening now.
“The problem with PMIs in a situation like the one we are currently experiencing is that they only report the balance of companies indicating whether activity is higher or lower.
“What they don’t tell us is how much activity has increased or decreased.
“And in this current episode, a large number of companies will experience a complete cessation of activity, which the PMI cannot explain and that is why the drop in GDP in Q2 will be much more significant than they expect suggest. “
There are not too many comfort crumbs that can be drawn from the latest figures, but one of them may be that the British manufacturing sector seems to be doing relatively well compared to the service sector.
This may reflect the fact that, as pubs, bars, hotels and restaurants are all closed, activity in many sectors of the service sector has completely frozen while in some manufacturing sectors, notably for medical and medical equipment, production has been accelerated in some cases.
Another is that, according to Chris Williamson of IHS Markit, business optimism for the coming year has in fact recovered from the historic low in March.
In the United States, meanwhile, although the number of new claims reported today is monstrous, it represents a slowdown from the 5.2 million claims observed the previous week, which was itself down the previous week.
He suggests that the rate at which American jobs are being destroyed has at least peaked.
The biggest question – and it depends heavily on the end of the foreclosure – is when these jobs can be replaced.