US jobless claims surge to record 3.3 million over coronavirus crisis
The number of Americans filing claims for unemployment benefits shot to record of more than 3 million last week as strict measures to contain the coronavirus pandemic ground the country to a sudden halt, unleashing a wave of layoffs that likely brought an end to the longest employment boom in U.S. history.
According to Press TV, initial claims for unemployment benefits rose to 3.28 million in the latest week from a revised 282,000 the previous week, eclipsing the previous record of 695,000 set in 1982, the U.S. Labor Department said on Thursday.
Economists polled by Reuters had forecast claims would rise to 1 million, but estimates had ranged to as high as 4 million.
With streets in major US cities barren, and shops and restaurants forced to close due to the coronavirus pandemic, economists warn of a record explosion of Americans filing for unemployment benefits.
Governors in at least 18 US states, accounting for nearly half the country’s population, have ordered residents to stay mostly indoors. “Non-essential” businesses have also been ordered closed. According to economists, a fifth of the workforce is on some form of lockdown.
Economists are projecting the pandemic's shutdown could lead to a staggering 14 percent contraction of the US economy, and the Conference Board on Wednesday said unemployment could rise to as high as 15 percent later in the year -- far beyond the 10 percent peak hit in October 2009 during the global financial crisis.
With layoffs surging, a significant expansion of unemployment benefits for the millions who will lose jobs as a result of the coronavirus outbreak was included in an economic relief bill nearing final approval in Congress. One provision in the bill would provide an extra $600 a week on top of the unemployment aid that states provide. Another would extend 13 additional weeks of benefits beyond the six months of jobless aid that most states offer.
Many people who have lost jobs in recent days have been unable to file for unemployment aid because state websites and phone systems have been overwhelmed by a crush of applicants and have frozen up. That logjam suggests that Thursday’s report on filings for unemployment benefits actually understates the magnitude of job cuts last week.
Even for those able to file a claim, the benefits will take time to kick in. It typically takes two to three weeks before applicants receive any money. State agencies must first contact their former employers to verify their work and earnings history. Only then can the employee’s weekly unemployment benefits be calculated.
Worsening the problem, most state agencies that handle unemployment claims are operating at historically low funding levels and staffing that are intended to handle a trickle of claims. Just weeks ago, the job market was in the strongest shape it had been in decades.