The governor’s “Stay Home, Stay Safe” executive order went into effect March 23rd and has been extended through the end of April. New data are revealing the effects on Michigan’s economy.
“At this point it’s not looking very pretty.”
Paul Isely is Associate Dean in the Seidman College of Business at Grand Valley State University. He’s examining two new sets of economic data.
The first are weekly unemployment claims. In early March they registered about 5,000 a week. By mid-March into early April those claims averaged 270,000 per week.
“Those are extraordinary numbers. To put it into context , that would result in an insured unemployed rate at this point of around 16% which is almost double the peak we had in the 2008-2009 recession.”
The second set of data are the number of WARN notices businesses are required to tell the federal government when they’re going to have a mass layoff.
“We’ve now had essentially, as many warn notices in the last two weeks of March as we had all of last year. And we have more WARN notices effecting more workers than in the first six weeks following the Lehman failure in 2008 when the bottom fell out of the markets then.”
A dramatic drop over a short period of time. Taken together, the acceleration in unemployment claims and WARN notices spells a deep frontend recession.
“So, what we’re starting to look more carefully at now is, how does the economy start to phase back in at the end? So, as we start getting into May, June, July, what are the possible scenarios for how fast different types of industry come back? Right now, Europe is starting to experiment with that because they’re two to three weeks ahead of us on where this curve is and we’re starting to see different countries experiment with different ways to reopen their economy.”
Isely says in every case it’s phased happening in stages and it’s not very fast.