Coronavirus Economy: Unemployment Keeps Rising, Nearly 3 Million More Added To Rolls

The Labor Department reported nearly 3 million more Americans filed for unemployment benefits last week, bringing to 36.5 million the number of claims filed since coronavirus shutdowns began in mid-March. The 2.98 million claims filed for the week that ended Saturday was the lowest number in eight weeks and the sixth straight week of decline.

Last week, the Bureau of Labor Statistics pegged the April jobless rate at 14.7%. Thursday’s report pushed the estimated rate to 15.7%. Goldman Sachs predicted earlier this week the jobless rate could hit 25% in the second quarter – eclipsing the 24.9% rate during the height of the Great Depression in 1933.

“The most important story in today’s data is that states continue to slog through the unbearable backlog of applications and move people onto unemployment rolls,” Andrew Stettner, one of the nation’s leading unemployment experts and a senior fellow at the Century Foundation, said in an email to IBTimes.

“As a result, insured unemployment climbed again to an all-time high of 22.8 million workers. This follows on the Treasury Department’s report earlier this week that unemployment programs have delivered a whopping $48 billion in aid in April alone.”

Stettner noted the $2.2 trillion coronavirus relief package adopted by Congress at the end of March made independent contractors eligible for benefits for the first time. They added 3.4 million people to the rolls as the backlog of claims continued to work their way through state unemployment systems. Just 79,500 workers received extended benefits, a number likely to rise in coming weeks.

“Policymakers have a long way to go to figure out how to move these record numbers of workers back into their jobs and off unemployment,” Stettner said, adding the biggest challenge will be addressing safety concerns for both workers and consumers.

He continued: “Even if safety concerns are addressed, it won’t be easy for companies to rehire in the depressed economic environment. One solution is for workers to move into short-time compensation [STC] plans, which puts them on the job part-time while paying them partial UI [unemployment insurance] benefits. STC claims have jumped to 122,500 in the week ending April 25, nearly five times higher than the figure one month ago. But this won’t be enough.”

Federal Reserve Chairman Jerome Powell on Wednesday urged lawmakers to spend big and not worry about deficits to keep the economy from suffering permanent damage during a prolonged coronavirus recession, an idea to which Republicans are cool. Democrats on Tuesday unveiled a $3 trillion relief plan that would double the amount of virus-fighting funds already approved.

The BLS said the total number of people receiving unemployment stood at 25.36 million for the week that ended April 25, before the extended benefits were turned on. Since then, more than 6 million new claims were filed.