US Unemployment Claims Surge From 300 Thousand to 3.3 Million IN A WEEK

The number of Americans filing for unemployment benefits surged to a record 3.28 million last week as businesses shuttered and laid off workers as part of efforts to slow the spread of the coronavirus.

In the biggest insight yet into the economic toll the pandemic is already inflicting, initial jobless claims in the week ended March 21 surged from 282,000 in the prior week and more than quadruple the previous record high of 695,000 in 1982, according to Labor Department figures released Thursday. The data date back to 1967.

Economists’ projections for the figure ranged as high as 4.4 million.

“This shows the severity of the downturn and the speed of it,” said Michelle Meyer, head of U.S. economics at Bank of America Corp. “It speaks to the unusual nature of this recession — it is an abrupt plunge into recession versus prior downturns, where the shock has time to multiply. We could have very high numbers continue for the next few weeks.”

Claims increased in all 50 states and the District of Columbia, with nine states reporting increases of at least 100,000 from the prior week. The state data below aren’t adjusted for seasonal fluctuations:

• Pennsylvania reported the biggest number of claims, with 378,900
• California claims rose 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
• Ohio claims rose to 187,800
• Illinois claims rose to 114,700
• Florida claims rose to 74,000
• Michigan claims jumped to 129,300

The surge reflects reports from state-level unemployment offices across the country last week citing unprecedented levels of web traffic and exponential increases in applications for unemployment benefits. The reported claims likely represent just the beginning of millions of virus-related job losses as more states order non-essential businesses closed.

U.S. lawmakers are aiming to boost benefits for those laid off. As part of a $2 trillion stimulus package waiting to be approved by the House of Representatives, unemployment insurance would be extended and expanded.

The sharp rise in claims signals the unemployment rate could rise several percentage points in coming months, after matching a 50-year low of 3.5% in February, which reflected 5.8 million unemployed Americans.

The sudden stop of the nation’s economy paired with a consumer retrenchment have several economists predicting gross domestic product will shrink in the second quarter by the most in quarterly records dating back to 1947.

Source: Bloomberg