Unemployment Claims Surge to Historic High As Pandemic Slams Economy
WASHINGTON – U.S. unemployment claims reached a historic high of 3.28 million last week due to a wave of layoffs and business closures stemming from the coronavirus outbreak, the Labor Department reported Thursday.
The figure shattered the previous record of weekly jobless claims from October 1982 of 695,000.
Weekly claims for unemployment insurance rose to 3,283,000 between March 15 and 22, up from just 281,000 applications for jobless benefits filed between March 8 and 14, the department said.
The losses were worse than consensus estimates of 1.5 million and threatened to erase this week’s stock market gains.
A Goldman Sachs report last week predicted 2.25 million unemployment claims, while Citigroup had pegged upwards of 4 million.
Moody’s Analytics, meanwhile, has projected 5 million-6 million job losses for the month of March 2020, according to a report in Fortune magazine.
The spike in weekly applications is a reflection of the widespread damage the viral outbreak is doing to the economy.
The pace of layoffs is sure to accelerate as the U.S. economy sinks into a recession. Revenue has collapsed at restaurants, hotels, movie theaters, gyms, and airlines. Auto sales are plummeting, and car makers have closed factories. Most such employers face loan payments and other fixed costs, so they’re cutting jobs to save money.
As of the middle of the month, the highest unemployment rates in the nation were in the states of Alaska, New Jersey, Connecticut, Rhode Island, West Virginia, Illinois, Minnesota, Montana, Pennsylvania, and the territory of Puerto Rico.
The largest increases in initial claims were seen in California, Washington, Nevada, Pennsylvania, and Massachusetts.
In most states, the biggest layoffs have been in the service industry, transportation and warehousing, accommodations, construction, administrative support, and any sector having to do with the arts and recreation.
Heidi Shierholz, a senior economist at the Economic Policy Institute, said Thursday’s report shows “in a breathtaking manner” the impact the coronavirus shock is having on the economy.
“I have been a labor economist for a very long time and I have never seen anything like this,” she added, pointing out that in just two weeks, unemployment insurance claims have risen 1500%.
Shierholz said while the $2 trillion stimulus package that passed the Senate last night is a “very important step” in the government’s response to the coronavirus pandemic, the unemployment report illustrates “further help from policymakers will clearly be needed to stem the economic damage.”
House Majority Leader Steny Hoyer, D-Md., said Thursday that “while the tenfold increase in new unemployment insurance claims is shocking, it is not surprising as it reflects our national effort to defeat the coronavirus.
“These numbers are unprecedented, but so is the challenge before us and our unity of purpose in meeting it,” he said. “Only by ensuring that as many Americans as possible can stay home and help flatten the curve will we save countless lives and win this fight together.”
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