Record 16.8 Million in U.S. Have Filed for Unemployment Since Virus Began
With 6.6 million people seeking unemployment benefits last week, more than one in 10 U.S. workers have lost their jobs in just the past three weeks due to the coronavirus outbreak.
The numbers show that this is the largest and fastest string of job losses in records dating to 1948. By contrast, during the Great Recession it took about 10 months for unemployment claims to go as high as they now have in less than a month.
In the past three weeks, 16.8 million Americans have filed for unemployment aid. More job cuts are expected.
The unemployment rate could hit 15% when the April employment report is released in early May.
“The carnage in the American labor market continued unabated,” said Joseph Brusuelas, chief economist for RSM, a tax advisory firm.
The viral outbreak is believed to have erased nearly one-third of the economy’s output in the current quarter.
Non-grocery retail business plunged 97% in the last week of March compared with a year earlier, according to Morgan Stanley. The number of airline passengers screened by the Transportation Security Administration has plunged 95% from a year ago. U.S. hotel revenue has tumbled 80%.
The government-mandated business shutdowns that are meant to defeat the virus have never brought the U.S. to such a sudden and violent standstill. For that reason, economists are struggling to assess the duration and severity of the damage.
“We’re just throwing out our textbooks,” said Beth Ann Bovino, chief U.S. economist at S&P Global Ratings.
The Penn Wharton Budget Model, created at the University of Pennsylvania’s business school, projects that the U.S. economy will shrink at an astonishing 30% annual rate in the April-June quarter — even including the government’s new $2.2 trillion relief measure, the largest federal aid package in history by far. An economic contraction of that scale would be the largest quarterly plunge since World War II.
A key aspect of the rescue package is a $350 billion small business loan program that is intended to forestall layoffs. Small companies can borrow enough to cover payroll and other costs for eight weeks. And the loans will be forgiven if small businesses keep or rehire their staffs.
The Treasury Department has begun to roll out the loans to mixed results. Many small businesses have had trouble accessing loan applications, and many economists say the $350 billion is insufficient.
Treasury Secretary Steven Mnuchin has said he will seek an additional $250 billion for the program from Congress.
The rescue package also added $600 a week in unemployment benefits, on top of what recipients receive from their states. Alabama started giving out the extra payments yesterday.
(Copyright 2020 The Associated Press contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.)
