Record 16.8 Million People Have Sought U.S. Jobless Aid Since Coronavirus Outbreak Began

Record 16.8 Million People Have Sought U.S. Jobless Aid Since Coronavirus Outbreak Began

With a startling 6.6 million people seeking unemployment benefits last week, the United States has reached a grim landmark: More than one in 10 workers have lost their jobs in just the past three weeks to the coronavirus outbreak.

The figures collectively constitute the largest and fastest string of job losses in records dating to 1948. By contrast, during the Great Recession it took 44 weeks — roughly 10 months — for unemployment claims to go as high as they now have in less than a month.

The damage to job markets is extending across the world. The equivalent of 195 million full-time jobs could be lost in the second quarter to business shutdowns caused by the viral outbreak, according to the United Nations’ labor organization. It estimates that global unemployment will rise by 25 million this year. And that doesn’t even count workers on reduced hours and pay. Lockdown measures are affecting nearly 2.7 billion workers — about 81 percent of the global workforce — the agency said.

Around half a billion people could sink into poverty as a result of the economic fallout from the coronavirus unless richer countries act to help developing nations, Oxfam, a leading aid organization, warned Thursday.

In the United States, the job market is quickly unraveling as businesses have shut down across the country. All told, in the past three weeks, 16.8 million Americans have filed for unemployment aid. The surge of jobless claims has overwhelmed state unemployment offices around the country. And still more job cuts are expected.

More than 20 million people may lose jobs this month. 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 U.S. economy’s output in the current quarter. Forty-eight states have closed non-essential businesses.

A nation of normally free-spending shoppers and travelers is mainly hunkered down at home, bringing entire gears of the economy to a near-halt. 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%.

Applications for unemployment benefits are a rough proxy for layoffs because only people who have lost a job through no fault of their own are eligible.

The wave of layoffs may be cresting in some states even while still surging in others. Last week, applications for jobless aid declined in 19 states. In California, they dropped nearly 13% to 925,000 — still a shockingly high figure. In Pennsylvania, they dropped by nearly one-third to 284,000. That’s still more than the entire nation experienced just four weeks ago.

By contrast, in Georgia, which issued shutdown orders later than most other states, filings for unemployment claims nearly tripled last week to 388,000. In Arkansas, they more than doubled. In Arizona, they jumped by nearly 50%.

On Thursday, the Federal Reserve intensified its efforts to bolster the economy with a series of lending programs that could inject up to $2.3 trillion into the economy. Chairman Jerome Powell said that the economy’s strength before the viral outbreak means it could rebound quickly in the second half of the year.

“There is every reason to believe that the economic rebound, when it comes, will be robust,” Powell said.

In many European countries, government programs are keeping people on payrolls, though typically with fewer hours and lower pay. In France, 5.8 million people — about a quarter of the private sector workforce — are now on a “partial unemployment” plan: With government help, they receive part of their wages while temporarily laid off or while working shorter hours.

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