USA TODAY International Edition
Jobless toll tops 26 million
Expected 16.4% rate would be highest since Great Depression
More than 26 million Americans filed for unemployment benefits over the past five weeks, a record- breaking number revealing the devastating toll the coronavirus pandemic has taken on the economy.
About 4.4 million people filed for unemployment last week alone, the Labor Department said Thursday, lower than the roughly 5.2 million who filed the week before and down from the all- time high of 6.86 million applications in late March.
Though last week’s tally was lower, the number of claims was still staggering, building toward a projected unemployment rate of 16.4% in May that would be the highest since the Great Depression, according to Morgan Stanley. There were more claims filed over the five weeks than there were jobs created since the economic downturn in 2008.
The nation’s economy began to shut
down last month, as businesses closed and most residents were told to stay home to slow the spread of the coronavirus. Air travel ground to a near halt, restaurant dining all but disappeared and shopping was limited mainly to the grocery store or online sites as 43 states said most residents should remain inside.
Companies faced with dwindling customers and revenue began laying off and furloughing employees. And economists say claims will keep mounting as the economy continues to sputter, cash- strapped local governments start to cut jobs, and gig workers apply for relief they could not have received in the past.
Bleak outlook for unemployment
“Claims declined for a third straight week, a positive development,’’ Rubeela Farooqi, chief U. S. economist for the research consultancy High Frequency Economics, wrote in an investors note. “But filings remained at a high level. ... We cannot be sure of the magnitude of job losses in April but are certain they will be shockingly high.’’
Oxford Economics had a similarly bleak outlook, predicting a 14% unemployment rate for the month of April and projecting that it may take two years for the country to regain the millions of jobs lost during the pandemic.
“We expect total job losses during the pandemic to approach 30 million,” Oxford wrote in a note to investors, adding that a recovery in the labor market would be slow and jobs wouldn’t rebound to their 2020 levels until 2022.
Jobless claims may also continue to swell because the $ 2.2 trillion federal emergency stimulus package approved in March expanded the number of people who are eligible for unemployment benefits, including those who’ve gone from full- time to part- time work.
“This is just the tip of the iceberg since overall job losses in April could be 10 to 20 times larger than those in March.”
Dante DeAntonio Moody’s Analytics
Dante DeAntonio with Moody’s Analytics wrote in a note that among workers with full- time positions in February, 1.4%, or more than 1.6 million, shifted to part- time schedules in March, the largest share in more than a decade.
“Assuming the lion’s share of that increase is the result of COVID- 19 means that most of those workers are newly eligible for ( unemployment insurance) benefits,” he wrote. “This is just the tip of the iceberg since overall job losses in April could be 10 to 20 times larger than those in March.”
‘ A long wait’ for applicants
Jennifer Brennan is one of the millions trying to get help.
A massage therapist who has her own practice in Silver Spring, Maryland, Brennan was heartened when she learned the $ 2.2 trillion federal stimulus package approved in March would allow the self- employed to get unemployment insurance for the first time.
“There was a sense of relief for sure,” says Brennan, who had to close her business last month. “And then days went by. Weeks went by.’’
She tried to file a jobless claim with the state of Maryland on March 29 only to be told the system wasn’t set up yet to process applications from the self- employed. She recently learned that she will finally be able to make a claim starting Friday.
“It’s been a long wait,’’ she says. “And there’s no guarantee I’ll get it.”
Brennan has been relying on her dwindling savings and the few hundred dollars she earns teaching yoga classes that are live- streamed. “I haven’t had to tango with creditors yet,’’ she says. “I’m hoping I won’t.’’
She is worried about having enough money to survive, now and in the future.
“I’m actually a little bit depressed,’’ Brennan says, adding that she has to work closely with clients which may be difficult amid lingering worries about COVID- 19. “This great unknown ... is very much weighing on me.’’