Coronavirus Economy: More Than 3 Million More File Initial Unemployment Claims 7 Weeks Into Pandemic

More than 3 million people filed initial unemployment claims last week bringing the coronavirus job losses to more than 33 million, the Bureau of Labor Statistics reported Thursday. Last week’s filings by nearly 3.17 million Americans was down 677,000 from the previous week’s revised level.

Job losses since the pandemic began ravaging the U.S. have wiped out all gains since the Great Recession and likely pushed the overall unemployment rate to levels not seen since the Great Depression.

“Taken together, today’s numbers all but ensure that the April unemployment rate will surge toward depression-era levels, perhaps nearing as high as 20 percent,” unemployment expert Andrew Stettner of the Century Foundation said in a statement emailed to IBTimes.

Grant Thornton chief economist Diane Swonk predicted the hangover from the unprecedented job losses will last.

“Absent hiring activity on an unprecedented scale, unemployment could remain in double-digits into 2021,” a working paper from the Federal Reserve Bank of San Francisco said. “We also find that the increase in measured unemployment could be meaningfully tempered by a substantial reduction in labor force participation.”

Last week’s figures may have been tempered by the Small Business Administration’s Paycheck Protection Program, which handed out more than 2.2 million loans since April 27 in its second round of funding. At the same time, the $2.2 trillion CARES Act made independent contractors and the self-employed – two categories of workers never before eligible for unemployment – eligible for benefits.

Before the pandemic hit, unemployment stood at 3.5% in February, with 5.8 million Americans looking for work. The BLS estimated unemployment at 15.5% for the week ended April 25, up nearly 3 points from the previous week. Filings for last week are expected to push the rate up further. The final statistics for April were to be released Friday.

“The continued growth in these unemployment rolls is a harbinger of a catastrophic jobs report on Friday. With claims at these levels, it would be no surprise if payrolls shrunk by an all-time high of 20 million jobs in the month of April. The data point to an unprecedented cascading crisis that hit frontline services like restaurants and retail businesses first but has now reached into every corner of our economy, from manufacturing to even the healthcare industry,” Stettner said.

Mark Hamrick, senior economic analyst for Bankrate, said last week’s numbers indicate “the flood of layoffs is relenting” but it remains to be seen how consumers will respond to states’ relaxed stay-at-home restrictions.

U.S. states paid benefits to 22 million Americans the week ending April 25, compared to 1.6 million a year ago.

An online survey of 31,271 adults by the opinion platform Piplsay indicates 56% of U.S. families have suffered financially from the pandemic with 53% saying they either lost their incomes or took a pay cut. The survey indicated 34% lost income, 30% were placed on furlough, 19% took pay cuts and 17% lost their jobs.