Record 3.3M seeking unemployment
Layoffs are skyrocketing as the coronavirus upends the U.S. economy.
The number of Americans filing initial applications for unemployment benefits jumped nearly twelvefold to a record 3.28 million last week, the Labor Department said Thursday, offering the most vivid evidence yet of the outbreak’s widespread damage to the economy.
The total was well above the 1.5 million claims economists had forecast, according to the median estimate of those surveyed by Bloomberg.
The pandemic has set off the most abrupt near-shutdown of the economy in history. Many restaurants, shops, movie theaters, sports arenas and other gathering spots across the country suddenly closed their doors or scaled back service last week to contain the spread of the virus.
Layoffs continued in accommodation and food services, the Labor Department said. Other industries hit hard included health care and social assistance, arts, entertainment and recreation, transportation and warehousing, and manufacturing industries, the department said.
Economists’ estimated of the jobless claims total – a reliable gauge of layoffs across the country – varied widely, from as little as 1 million or so to upward of 4 million.
The actual total was on the higher side and so was expected to roil stocks, said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. But the Dow Jones industrial average was up nearly 900 points in early afternoon trading Thursday in a sign that many investors had anticipated a dismal number and instead were pinning their hopes on the $2 trillion stimulus package passed by the Senate late Wednesday to cushion the outbreak’s economic blow. Many health officials expect the number of U.S. infections to begin waning in May or June as the weather warms.
The previous week’s jobless claims total was revised up marginally, to 282,000 from 281,000. The four-week average, which usually smooths out volatility, jumped by 765,750 to 998,250.
To put the economy’s breathtaking turnabout in perspective, the 211,000 claims filed the week ending March 7 were near a half-century low.
As job losses mount, some economists say the nation’s unemployment rate could approach 13% by May. By comparison, the highest jobless rate during the Great Recession, which ended in 2009, was 10%.
“What seemed impossible just two weeks ago is now reality,” said Nancy Vanden Houten, an economist at Oxford Economics, a consulting firm.
Last week’s total is several times larger than the previous record of 695,000 unemployment insurance claims in October 1982. It also far surpasses the count of 517,000 two weeks after the 9/11 terrorist attacks, and 570,000 during the depths of the financial crisis in December 2008, Morgan Stanley said.
Unemployment claims jumped by 343,000 in Pennsylvania, 180,000 in Ohio, 146,000 in New Jersey, 140,000 in Massachusetts, 139,000 in Texas, 129,000 in California and 119,000 in Washington.