Weekly jobless claims skyrocket to 3 million, most ever
Updated: Apr 8, 2020
Last week 3 million Americans filed for unemployment benefits as the impact of the novel coronavirus and government-implored quarantines continued to stagnate the economy, according to the Labor Department. The number of filings is the most ever, dwarfing the number of initially weekly jobless claims of the 2008 financial crisis and the previous high in 1967, which was about 700,000.
Economists had predicted that unemployment claims could spike above 2 million, and they were proven correct by the new report that initial jobless claims surged to 3 million last week.
Businesses large and small across the country have shut down or greatly reduced their hours in response to the virus. Calls for increased social distancing in order to slow the pandemic have limited traffic to businesses, many of which do not have adequate cash reserves to weather an extended duration of losses.
State websites for unemployment claim filings have reportedly been crashing amid significantly increased volume.
“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,” Federal Reserve Chairman Jerome Powell said on Thursday. “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.”
Unemployment claim figures were not concentrated in any one or small group of states. California's claims tripled, while Pennsylvania's claims increased by 20 times the week prior. Louisiana's claims rose from 2,255 to 72,620.
Despite the massive spike in job losses, the damage may be far from over. Some economists are estimating that by the summer, 14 million jobs will have been lost and that the U.S. will suffer an annualized decline in second quarter GDP of 30% or more.
The report comes just after leaders from the White House and the Senate from both parties came to an agreement on a $2 trillion economic relief bill aimed at keeping Americans employed through the duration of the pandemic. The bill would provide Americans with a one-time payment of about $1,200 per person, increase unemployment benefits, and give no-interest loans to struggling businesses.