As coronavirus continues to sweep through the world, the last three weeks have turned out the most devastating periods in history for the American job market.
Businesses continue to lay off and furlough workers leading to spike in unemployment claims to a level any American alive has ever seen in their lifetimes.
First-time unemployment benefit claims have surged more than 3,000% since early March.
6.6 million US workers filed for their first week of unemployment benefits in the week ending March 28, according to the Department of Labor — a new historic high.
That was far greater than economists had expected, and more than 3,000% the pre-pandemic levels. Economists characterized the increase as “monstrous,” “stunningly awful,” and “a portrait of disaster.”
Including the prior week’s 3.3 million initial claims, Americans have filed nearly 10 million jobless claims in the last three weeks alone.
That corresponds to roughly 6% of America’s 165 million strong work force, which in turn implies a 9.5% unemployment rate, according to Citi economist Andrew Hollenhorst.
“Further job loss expected in coming weeks is very likely to push unemployment above 10%, even taking account of a potential steep decline in the labor force participation rate, as some displaced workers are neither furloughed nor looking for work,” Hollenhorst wrote in a note.
The rules of who can file for unemployment benefits vary by state. But in the face of the coronavirus outbreak, the government has waived some restrictions. Independent contractors and self-employed people, for example, who don’t usually qualify, can now temporarily receive benefits through a pandemic unemployment assistance program Congress created.
Whether this week’s massive claims number was the worst of it remains to be seen. Ahead of the coronavirus outbreak, weekly first-time claims had been hovering in the low 200,000s.
This “tectonic shift” in the US labor market “implied a real-time unemployment rate of 10.1% at a minimum,” said Joseph Brusuelas, chief economist at RSM.
As companies continue to close their doors and shed workers to limit the spread of coronavirus throughout the population, more workers will need government aid to make ends meet.