» Nearly 3.3 million file jobless claims as economy comes apart amid coronavirus outbreak.
More than 3 million people filed for unemployment benefits last week, sending a collective shudder throughout the economy that is unlike anything Americans have experienced.
The alarming numbers, in a report released by the Labor Department on Thursday, provide some of the first hard data on the economic toll of the coronavirus pandemic, which has shut down whole swaths of American life faster than government statistics can keep track.
Just three weeks ago, barely 200,000 people applied for jobless benefits, a historically low number. In the half-century that the government has tracked applications, the worst week ever, with 695,000 so-called initial claims, had been in 1982.
Thursday’s figure of nearly 3.3 million set a grim record. “A large part of the economy just collapsed,” said Ben Herzon, executive director of IHS Markit, a business data and analytics firm.
The numbers provided only the first hint of the economic cataclysm in progress. Even comparatively optimistic forecasters expect millions more lost jobs, and with them foreclosures, evictions and bankruptcies. Thousands of businesses have closed in response to the pandemic, and many will never reopen. Some economists say the decline in gross domestic product this year could rival the worst years of the Great Depression.
And there was fresh evidence Thursday of the relentless course of the virus itself and the frustrating battle to stem its spread and tend to the ill. In New York, the state hardest hit, Gov. Andrew Cuomo reported a 40 percent increase in hospitalized patients in one day, to well over 5,000.
The surge dashed hopes that had been raised a day before, when Cuomo said the state’s social-distancing measures seemed to be slowing the growth in hospitalizations.
The number of cases in the United States now exceeds 80,000, the most of any nation, according to a New York Times database, and more than 1,000 deaths across the country have been linked to the virus.
The situation in the New Orleans area is particularly acute, with the city reporting more than 800 cases, a higher total than most states. Hospitals are overwhelmed, and essential safety equipment is running low.
President Donald Trump said the federal government planned to designate areas as being at high, medium or low risk for spreading the virus to guide local decisions on imposing or relaxing restrictions on movement and commerce.
The terrifying speed of the U.S. economic collapse from the pandemic has spurred lawmakers to action. Late Wednesday night, Republican and Democratic senators agreed on a $2 trillion aid package that would provide cash payments to nearly all Americans and would expand the unemployment system, among other changes. Final congressional approval is expected Friday.
The prospect of congressional action has helped buoy financial markets. A three-day rally has lifted stocks in the S&P 500 index more than 17 percent, including a rise of 6.2 percent on Thursday, though prices remain far lower than they were a month ago.
As staggering as the figures are for jobless claims, they almost certainly understate the problem. Some part-time and low-wage workers do not qualify for unemployment benefits. Nor do gig workers, independent contractors and the self-employed, although the emergency aid package passed by the Senate would broaden eligibility to include many of them.
Others who do qualify may not know it.
Despite the glitches, Thursday’s figures suggest the scale of the problem. In a single week, the pandemic wiped out a year and a half of job gains. The past two weeks’ claims alone would be enough to push the unemployment rate up to 5.7 percent from 3.5 percent in February — a half-century low that now seems like ancient history.
The worst could be yet to come. Herzon of IHS Markit said he expected a similarly large number next Thursday, when the Labor Department releases its report on new claims filed this week.
Some forecasters think the unemployment rate could hit 10 percent this summer, which would equal the highest level from the last recession more than a decade ago. Back then, it took nearly two years for the jobless rate to reach that height.
“What is really hard to fathom is just how fast these numbers are going to escalate,” said Carl Tannenbaum, chief economist at Northern Trust.
Still, some economists remain optimistic that the pain will be relatively short-lived. The congressional relief package is intended to, in effect, press “pause” on the economy, allowing idled workers and shuttered businesses to keep paying their bills so that they can spring back quickly once the health crisis eases. If it works, the recovery could be relatively swift; if it doesn’t, the cascade of layoffs and business failures could stretch on far longer.
Quintina Moore-Caraway, a ramp agent at George Bush Intercontinental Airport in Houston, was at work March 13 when her supervisor called her over. She was being furloughed, without pay, at the end of her shift.
“They said I could finish out my day on Friday, don’t come in on Saturday, and I haven’t been back since, with no pay,” she said.
Moore-Caraway, 46, was barely getting by on the $10 an hour she earned at the airport. She has no savings and no idea how she will pay her $688 rent bill on April 1. She has not been in the job long enough to qualify for unemployment, and the few places still hiring during the pandemic are not near bus routes.
“Through all the hurricanes, floods, I’ve never seen anything like this,” she said. “On the movies I have, not in real life.”
Some help may be on the way for workers like Moore-Caraway. Under the congressional aid package, most families would receive $1,200 per adult and $500 per child in direct payments. The bill would also increase unemployment benefits by $600 a week and extend how long laid-off workers could receive benefits. And it would waive some requirements for receiving jobless benefits, like the requirement that recipients look for work.