The number of Americans applying for unemployment benefits soared to a record 6.65 million last week, a level unimaginable just a month ago.
As states shut down commerce to prevent the deadly coronavirus from spreading, the weekly claims data have been among the first detailed figures to show the devastating economic hit, highlighting the extent to which U.S. businesses and workers are reeling from the global health crisis.
The figures also may add to pressure on the federal government to ensure that aid payments and loans under the $2 trillion stimulus package flow quickly to people and businesses.
“I never thought I’d see such a print in my lifetime as economist,” said Thomas Costerg at Pictet Wealth Management, who had the highest forecast in the Bloomberg survey, at 6.5 million. Claims are likely to stay elevated as more states announce stay-at-home orders, and it would be “not unthinkable” to see a 20 percent unemployment rate, more than double the high that followed the last recession, he said.
The 6.65 million jobless claims filed in the week ended March 28 were more than double the previous record of 3.31 million in the prior week, according to Labor Department figures released Thursday.
The figures come a day before the March jobs report, which is expected to show the first monthly decline in payrolls since 2010. Nonetheless, those figures will show only the start of the labor-market damage, as the government’s survey period covered early March, prior to the biggest rounds of layoffs and closures.
U.S. stocks rose after President Donald Trump said Russia and Saudi Arabia would announce crude oil production cuts.
The report showed that the virus is having a wider impact beyond just hotels and restaurants, with states reporting impacts in health and social assistance, factories, retail and construction. The 9.96 million combined initial claims in the last two weeks is equivalent to the total in the first 6 1/2 months of the 2007-2009 recession.
Continuing claims, which are reported with a one-week lag, jumped by 1.25 million to 3.03 million in the week ended March 21 — the highest since 2013. That pushed the insured unemployment rate up to 2.1 percent from 1.2 percent.
“When you look at the number last week and this week and take those together that’s roughly a 6 percentage-point rise in the April unemployment already, and we have a few more weeks to go for the April employment report,” Michael Gapen, chief U.S. economist at Barclays PLC, said on Bloomberg Radio. “It is likely the unemployment rate will be rising above where we saw it in ’08 and ’09 and may come as soon as that April employment report, if not certainly into the May report.”
One caveat to the data: the department’s seasonal adjustments are likely overstating the level of claims, according to Jacob Oubina of RBC Capital Markets. On an unadjusted basis, there were 5.82 million applications last week following 2.92 million the prior week.
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