(OPINION) Michael Snyder – Even Jerome Powell is admitting that the boom years are over. For months, I have been trying to explain to my readers that the debt-fueled “prosperity” that we were enjoying prior to the COVID pandemic won’t be coming back, and initially, I received quite a bit of criticism for saying that.
But that criticism has subsided, because at this point pretty much everyone can see the truth. Despite stimulus package after stimulus package, and despite unprecedented intervention by the Federal Reserve, we continue to be mired in the worst economic downturn since the Great Depression of the 1930s. Fear of the virus continues to drag down the overall level of economic activity, more businesses are going under with each passing day, and the layoff announcements never seem to end.
Normally, Federal Reserve officials try very hard to be relentlessly optimistic. But during a European Central Bank panel discussion on Thursday, Federal Reserve Chair Jerome Powell openly admitted that “we’re not going back to the same economy”… “We’re not going back to the same economy,” Powell said. “We’re recovering, but to a different economy and it will be one that is more leveraged to technology, and I worry that it’s going to make it even more difficult than it was for many workers.”
The central bank leader said he was referring specifically to “relatively low-paid public-facing workers who are bearing this brunt,” many of whom are women and minorities. His use of the phrase “a different economy” really got my attention. When I am trying to break some really bad news to someone in a gentle way, I will often use the word “different” to describe what things will be like moving forward, and I think that Powell is doing the same thing here.
He knows that there is no way that things will “return to normal” any time soon, and he is quite correct to be particularly concerned about how this will affect low paid workers. Low paid workers have been losing their jobs at a much higher rate than anyone else, and the job losses just keep rolling in.
On Thursday, we learned that another 709,000 Americans filed new claims for unemployment benefits last week, and that number is more than three times higher than what we witnessed during a typical week in 2019… The Labor Department report showed an eleventh straight week that new jobless claims totaled below 1 million.
But new claims have not yet broken back below 700,000 since the start of the pandemic and have held sharply above levels from before the outbreak. Throughout 2019, new initial unemployment claims were coming in at an average of just over 200,000 per week. As of October 24th, a total of 21.16 million Americans were bringing home some type of unemployment assistance. One year ago, that number was just 1.45 million. In other words, we are in the midst of a national unemployment nightmare. READ MORE