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Economists are increasingly worried about the length and severity of a global recession resulting from the coronavirus outbreak. Some 6.6 million people in the U.S. filed new unemployment insurance claims in the latest numbers — nearly 20 times that of a typical week. Melina Delkic of the Briefings team spoke with Ron Lieber, The Times’s Your Money columnist.
What’s the first thing someone who is laid off should do?
Apply for unemployment — and keep trying. The new legislation allows for an extra $600 per week of assistance, and that can be enough to make a difference between financial disaster and near financial calamity. That’s why Congress offered it.
What do you tell people who are struggling to process all this?
It doesn’t look quite like anything we’ve seen in our lifetime. Trying to plan or make predictions is really hard — and to tell people to embrace that uncertainty is not really helpful. I think the best thing is to talk to as many people as possible who have the same uncertainty that you do.
Will the U.S. economy bounce back to where it was before, or do you expect lasting changes?
If we continue to believe that capitalism and market economics are the right way to structure our country, then there probably ought to be at least some way our economic activity will revert to some level of normalcy. I would not believe anybody who is trying to predict when that will be.
You’ve written in the past couple of months that despite the tumult in the stock market, most people should pretty much sit still. Is that still the case?
All the best economic science tells us that if — and it’s a big “if” — you’re willing to stay invested in stock for decades and decades, if you just sit still more or less, keep putting money in at regular intervals, and sell some stock when stock prices get too high and buy some stock when the prices fall, you will do better and earn more than most professional brokers.
Now, that’s a science-based answer — it’s not quite a behavioral-science-based answer. I recognize that there are people who have never been psychologically tested in this way.
That’s it for this briefing. See you next time.
Melissa Clark provided the recipe, and Theodore Kim and Jahaan Singh provided the rest of the break from the news. You can reach the team at email@example.com.
• We’re listening to “The Daily.” Today’s episode is about job losses in the U.S.
• Here’s today’s Mini Crossword, and a clue: Tip off (five letters). You can find all our puzzles here.
• The Times was honored by the Overseas Press Club with five awards, leading all news outlets for the second straight year.