About 33 million Americans filed for unemployment benefits over the past seven weeks, a staggering number that foreshadows a monthly jobless rate expected to be the worst on record.
Roughly 3.2 million people filed for unemployment last week alone, the Labor Department said Thursday. That was fewer than the 3.8 million who filed the week before and down from the all-time high of 6.86 million applications in late March.
But the number who sought unemployment assistance through March and April exceeds all the jobs created since the Great Recession.
The number of new weekly claims has slowed, but the tally is a snapshot of the April jobs report to be released Friday which economists predict will be the worst the American workforce has ever seen.
Unemployment is expected to have spiked to a record 15% to 20%, a devastating confirmation of the toll the coronavirus pandemic has taken on the economy.
"We expect to see historically large declines across most industries, particularly those hardest hit by social distancing measures and the closure of nonessential businesses, and for which remote work is inaccessible," said Dante DeAntonio, an economist at Moody’s Analytics.
Unemployment claims are soaring as the coronavirus pandemic shuts down businesses.
The economy began to shut down in March, as restaurants and stores shuttered, residents were told to stay home, and travel ground to a virtual halt to try and slow the spread of the coronavirus.
BofA Global Research forecasts that 22 million nonfarm jobs were lost in April, an "unprecedented'' number that will hike the unemployment rate to 15%.
Yet even a jobless rate that Moody’s predicts will probably be at the "highest point since the Great Depression’’ will not reflect the full picture, as the unprecedented response to the coronavirus pandemic upends traditional measures used to count those who are out of work.
For instance, workers are typically counted as unemployed if they’re out of a job and making an effort to find another. But state-wide shutdowns of nonessential businesses may make such a search impossible.
"The official unemployment rate … will be too narrowly defined to capture the true depth of the impact to workers,’’ DeAntonio wrote. "With entire swaths of the economy shuttered in April, it is unrealistic to think that most laid-off workers will be actively looking for work, as there may not be anywhere to look.’’
Traditional measures will also not capture the number of people who are unable to work because they've been infected by the virus, or need to stay home to take care of children whose schools or daycare centers were closed because of COVID-19.
Initial jobless claims may remain high as overloaded state systems make it difficult to complete applications, carrying the tide over from week to week.
And though many states are starting to let some businesses reopen, layoffs and furloughs are continuing as wary consumers curb their spending, and local and state governments consider job cuts amid dwindling tax revenue.
"States are figuring out how to re-open their economies with some already beginning to do so gradually,'' said BofA Research, which expects jobless claims to have slid to 3.3 million last week. "However, the labor market is likely to remain extremely subdued and initial filings still elevated given the overload to the infrastructure."
The economy will slowly bounce back. But that is likely months away.
"Social distancing measures are being gradually lifted, but It will take time to undo the economic damage,'' says the global advisory firm Oxford Economics. "Significantly weaker demand, supply chain disruptions, tighter financial conditions, and uncertainty over the virus’s trajectory will pose considerable headwinds to an economic rebound that we expect will gradually commence in'' the second half of the year.
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