Unemployment Claims Crash To 3.2 Million, More Than 4 Times Previous Record
As businesses go into mandatory shutdown across the country due to the coronavirus pandemic, a record number of Americans have rushed to file for their first week of unemployment benefits.
Unemployment claims reached 3.3 million last week alone, according to the Department of Labor. This number is higher than during the Great Recession, where unemployment claims peaked at 665,000 in March 2009, according to CNBC.
“That is the highest number of initial jobless claims in history since the Department of Labor started tracking the data in 1967. The previous high was 695,000 claims filed in the week ending October 2, 1982,” CNN reported.
There was an increase in claims in all 50 states as well as the District of Columbia. Nine states reported jumps of at least 100,000 from the prior week, unadjusted state data showed, according to Bloomberg.
The state with the highest number of claims was Pennsylvania, with an estimated 378,900. California followed with claims that increased by 129,200 to 186,800.
In New York state, where approximately half of all known coronavirus cases in the U.S. are located, claims rose by 66,000 to 80,300, Bloomberg reported.
By comparison, the week of March 9 had 282,000 unemployment claims nationwide. And prior to the outbreak, unemployment claims tended to be in 200,000s per week as a result of a strong job market
“Most historical comparisons of this scale are inadequate,” Glassdoor senior economist Daniel Zhao wrote in an email to CNN. “The closest would be natural disasters like major hurricanes. However, as today’s report shows, the coronavirus outbreak is economically akin to a major hurricane occurring in every state around the country for weeks on end.”
Due to the business shutdowns, many businesses have had to lay off or furlough workers, at least temporarily.
This will only get worse. Economists are expecting millions of job losses in the coming weeks.
“We estimate that by summer, 14 million workers will lose their jobs due to the coronavirus shock,” Heidi Shierholz tweeted. Shierholz is a former chief economist for the U.S. Department of Labor who is now with the Economic Policy Institute.
But experts are quick to point out any economic recession will be temporary.
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“This is a unique situation. People need to understand, this is not a typical downturn,” Federal Reserve Chairman Jerome Powell said on NBC’s “Today.”
“At a certain point, we will get the spread of the virus under control. At that time, confidence will return, businesses will open again, people will come back to work,” he added. “So you may well see a significant rise in unemployment, a significant decline in economic activity. But there can also be a good rebound on the other side of that.”