Unemployment claims near 17 million in three weeks as coronavirus ravages economy

Rebecca Rainey
Quint Forgey

Unemployment claims remained high last week at 6.6 million, the Labor Department reported, as massive job losses continued to pile up due to the coronavirus pandemic.

The claims, for the week ending April 4, flooded in as confirmed coronavirus cases approached 300,000 and as nearly every state ordered its citizens to stay at home. Economic forecasts that predict unemployment will exceed its historic 25 percent peak during the Great Depression are becoming routine, and the number of jobs lost in a mere three weeks now exceeds the 15 million that it took 18 months for the Great Recession to bulldoze from 2007 to 2009.

“In its first month alone, the coronavirus crisis is poised to exceed any comparison to the Great Recession,” said Glassdoor Senior Economist Daniel Zhao in a statement. “The new normal for UI claims will be the canary in the coal mine for how long effects of the crisis will linger for the millions of newly unemployed Americans.”

The jobless claims are mounting as the federal government struggles to release waves of aid to the economy and businesses shutter. The Federal Reserve on Thursday unveiled emergency programs that could dole out more than $2 trillion in loans to businesses of all sizes, as well as to struggling state and city governments. Democrats and Republicans in the Senate clashed Thursday over a new aid package aimed at bolstering the $2 trillion economic rescue deal that lawmakers approved in March.

The 16.8 million unemployment claims, filed between March 15 and April 4, translate to more than one in 10 workers seeking jobless benefits. “We are nowhere near the end of this,” tweeted Heidi Shierholz, policy director at the left-leaning Economic Policy Institute. “The labor market has been upended.”

State unemployment agencies and the Department of Labor continued to struggle to process claims from a pool of eligible workers that now includes gig workers, independent contractors and workers who in ordinary times wouldn’t have worked long enough to qualify for benefits, but became eligible as a result of Congress’ $2 trillion coronavirus rescue package last month. That bill also increased employment benefits by $600 across the board.

The 6.6 million claims filed last week would have set a record going back to 1967, when the Labor Department’s data series began, had the previous two weeks’ claims not done so already.

“This is a catastrophe,” said Rep. Don Beyer (D-Va.), vice chairman of the congressional Joint Economic Committee, in a statement. “Nearly 17 million Americans have lost their jobs and they likely won’t find another one until the contagion is under control — and that may be a long way off.”

The Bureau of Labor Statistics reported last week that U.S. employers shed 701,000 jobs in March, pushing the unemployment rate up to 4.4 percent, but the survey week for that figure was mid-March, before the crush of claims began. Most estimates put the current unemployment rate in the double digits or close to it.

As policymakers struggled to come to terms with the economic fallout from the pandemic, one economist suggested last month’s expansion of unemployment benefits, including $600 added to every unemployment check through July, could blunt losses from mass layoffs.

Although the unemployment rate “could rise even higher over the coming months,” wrote Andrew Hunter, senior U.S. economist at Capital Economics, “the damage in terms of lost income may end up being less severe.”

DOL again attributed the jump in claims to the spread of Covid-19, the illness caused by the novel coronavirus. In previous weeks, the agency said the claims were concentrated in the services industries, as well as the health care, manufacturing, retail and construction industries.

The greatest number of new unemployment claims were in California, which processed an estimated 925,450 claims last week. America’s most populous state was an early hot spot for the coronavirus’ spread across the country.

Gov. Gavin Newsom said Wednesday that California had processed 2.4 million applications in the three weeks since mid-March, accounting for more than 12 percent of the state’s civilian workforce.

After California, Georgia was second with 388,175 new claims filed last week.

New York — the current epicenter of the outbreak in the U.S., with more than 149,000 Covid-19 cases — reported more than 345,200 new unemployment claims, according to the federal data.

Although that number is lower than the roughly 366,600 filings two weeks ago, the state government’s failure to process a deluge of inquiries clouded the total count of jobless New Yorkers.

Since March 9, New York has received 800,000 unemployment claims and processed about 600,000 of those filings, Gov. Andrew Cuomo’s office said Thursday. The state’s new online system to apply for unemployment compensation is scheduled to go live later Thursday evening.

In New Jersey, the state Department of Labor reported an all-time record of nearly 215,000 residents filed for unemployment benefits last week,bringing the state’s claims to nearly 577,000 for the three-week period that began March 15.

After New York, New Jersey has the most confirmed cases of Covid-19 in the country — more than 47,000 — and Gov. Phil Murphy has warned the state could soon experience a wave of infections similar to those seen in New York City.

The unemployment figures showed Florida was slightly less hard-hit, with 170,000 claims filed last week in the nation’s third largest state, a decrease from the record 228,000 residents who sought unemployment benefits two weeks ago.

The actual number of Floridians out of work is likely higher, however, as technical glitches with the state’s unemployment benefits website have left the overloaded online system inaccessible for tens of thousands of residents.

The pandemic’s international economic toll was also laid out in devastating detail Thursday in Canada’s latest federal employment report, which revealed America’s neighbor to the north lost more than a million jobs in March.

That decline, which represented 5.3 percent of the jobs in a country of 37 million people, helped drive Canada’s unemployment rate from 5.6 percent in February to 7.8 percent — its largest one-month increase since comparable data became available in 1976.

Joe Anuta, Andy Blatchford, Gary Fineout, Katherine Landergan and Katy Murphy contributed to this report.

This article was originally published at Politico on April 9, 2020. Reprinted with permission.

About the Author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter.

Prior to joining POLITICO in August 2018, Rainey covered the Occupational Safety and Health administration and regulatory reform on Capitol Hill. Her work has been published by The Washington Post and the Associated Press, among other outlets.

Rainey holds a bachelor’s degree from the Philip Merrill College of Journalism at the University of Maryland.

She was born and raised on the eastern shore of Maryland and grew up 30 minutes from the beach. She loves to camp, hike and be by the water whenever she can.

About the Author: Quint Forgey is a breaking news reporter for POLITICO.

Quint previously worked as a digital producer and editorial intern for POLITICO, a freelancer and news intern for The Wall Street Journal, an associate producer for Louisiana Public Broadcasting, a reporting intern for The News Journal in Delaware, and a national reporting fellow for the Carnegie-Knight News21 program.

Quint graduated from Louisiana State University, where he served as editor in chief of the student newspaper, The Daily Reveille.Quint Forgey

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Madeline Messa

Madeline Messa is a 3L at Syracuse University College of Law. She graduated from Penn State with a degree in journalism. With her legal research and writing for Workplace Fairness, she strives to equip people with the information they need to be their own best advocate.