KANSAS CITY, Mo. — It was announced Friday that the U.S. shed 701,000 jobs in March - the most monthly job losses in a decade. But it's only a fraction of the real hit to the workforce because many states issued stay-at-home orders that month.
This comes after the Department of Labor said Thursday that more than 6.6 million unemployment claims were made last week.
Rockhurst University Economics Professor, Michael Stellern said with the deep freeze right now and everybody staying home, it can present a number of difficulties, stating that what we're dealing with currently is just the tip of the iceberg.
"I think there will be a lot more people who are going to be needing assistance in the next couple of months," Stellern said. "It depends on how long this crisis lasts, how long this pandemic lasts. The sooner we can get it under control, the sooner the economy will come back."
The $2.2 trillion federal rescue package was signed last week, which Stellern believes will help the economy but will add to the deficit.
"The question is where is that money coming from," Stellern said. "Currently, the federal deficit is one trillion dollars so if we are increasing expenditures by $2.2 trillion, that's only going to add to the deficit."
He added there will also be a big challenge in providing what is needed for health care industries at the current moment.
"We don't have the resources available right now to do the testing, to provide the ventilators for people who need it and it's going to take us a while to get some of that equipment," Stellern said. "Again, it just depends on how many people come down with COVID-19 and what kind of services that they need."
He does believe the rescue package will reduce the number of future layoffs. He said it will be a tremendous stimulus to the economy once the pandemic's over and is optimistic about the future.
"Even though the current figures are very dismal, I'm 100 percent sure that in another year or two, the economy will be prospering right now, but it's going to take a while for us to work through this very difficult period," Stellern said.
Edward Jones financial advisor, Joseph Hyde said while it may be hard to think about the long-term goals during the current climate, it's important to do so.
"The way the market is reacting is very similar to other time frames where we've had a lot of panic and fear in the market," Hyde said. "So really set expectation for time horizon and tell people to tighten their seat belts a little bit and not abandon their long-term goals."
He shared five tips for people to focus on right now. The first is avoiding the temptation to panic.
Second, measure the progress against your long-term goals.
"Not what's happening this month, or this quarter, but thinking about the next five to 10 years and looking at those long-term important goals," Hyde said. "The third: put time on your side; investing in the long term, so put that to your advantage."
Fourth is to leverage the power of diversification.
"A 65 percent stock, 35 percent bond portfolio," Hyde said. "It may not participate as much when things are going great but certainly in time frames like right now, it really helps to protect relative to what the stock market is doing."
Last, lean into volatility.
"History shows us that you know standing up and investing when markets are low, is generally the toughest time to do it, but history shows us that it's the most impactful for your investment portfolio," Hyde said. "And that's because many companies are 30, 40, 50 percent below their value from a month ago when this began."
Once the short term challenges digress, he believes the economy will be moving forward again.
