The number of Americans filing claims for unemployment benefits surged to a record of more than 3 million last week as strict measures to contain the pandemic brought the country to a sudden halt, unleashing a wave of layoffs that likely ended the longest employment boom in US history.
The weekly jobless claims report from the labour department on Thursday offered the clearest evidence yet of the coronavirus’ devastating impact on the economy, which has forced the Federal Reserve to take extraordinary steps and the US Congress to assemble a record $2 trillion stimulus package.
Economists say the economy is already in recession. Weekly claims are the most timely labour market indicator. With nearly half the country’s population under some form of a lockdown, economists are bracing for further increases in jobless claims.
“With lockdowns across the country leading to a sudden stop in economic activity, the US economy will experience the largest economic contraction on record with the most severe surge in unemployment ever,” said Gregory Daco, chief US economist at Oxford Economics in New York. “We expect jobless claims will continue to climb as more economic activity shuts down.”
Initial claims for unemployment benefits rose 3 million to a seasonally adjusted 3.28 million in the week ending March 21, eclipsing the previous record of 695,000 set in 1982, the labour department said.
Economists polled by Reuters had forecast claims would rise to 1 million, though estimates were as high as 4 million.
The labour department attributed the surge to Covid-19. “During the week ending March 21, the increase in initial claims are due to the impacts of the Covid-19 virus,” it said. “States continued to cite services industries broadly, particularly accommodation and food service. Additional industries heavily cited for the increases included the health care and social assistance, arts, entertainment and recreation, transportation and warehousing, and manufacturing industries.”
