New jobless claims in the U.S. rose by 5,245,000 last week amid the coronavirus pandemic, bringing the total number filing for unemployment in the last four weeks to nearly 22 million, by far the worst stretch of job losses in U.S. history.
About 12 million people are now receiving monthly unemployment checks, the Labor Department reported Thursday, a number last reached in January 2010, just after the Great Recession officially ended.
But the number of first-time claims for the week ending April 11 was just a bit worse than the 5 million projected by economists surveyed by Dow Jones, and the futures trading in the markets actually rose on the news. Still, most economists agreed the news was extremely grim.
“The job losses are historic,” economist Julia Coronado told NBC News. “It means that we are going to be in for a double-digit unemployment rate.”
Nearly every state has shut down businesses deemed nonessential, which includes bars, restaurants and most retail stores, but The Associated Press reported Thursday that “white collar professional occupations, including software programmers, construction workers and sales people” are beginning to see mass layoffs.
“Collectively, the job cuts could produce unemployment on an epic scale. Up to 50 million jobs are vulnerable to coronavirus-related layoffs, economists say — about one-third of all positions in the United States. That figure is based on a calculation of jobs that are deemed non-essential by state and federal governments and that cannot be done from home,” the AP reported.
It’s unlikely that all those workers will be laid off or file for unemployment benefits. But it suggests the extraordinary magnitude of unemployment that could result from the pandemic.
“This crisis combines the scale of a national economic downturn with the pace of a natural disaster,” said Daniel Zhao, senior economist at Glassdoor. “And that’s really unprecedented in American economic history.”
The coronavirus effects to the economy are multiplying, and some economists say the unemployment rate might rise to 20% in April, which would be the highest since the Great Depression of the 1930s. Unemployment never rose above 10% during the Great Recession.
“The labor market is obviously very, very important, and has a high correlation with what is going on in the economy,” Jay Bryson, the acting chief economist at Wells Fargo, told NBC News. “It is showing us what I think we all know, that the economy is falling off a cliff at an unprecedented rate.”
The coronavirus sweeping across the world will likely lead to the worst financial crisis since the Great Depression, the International Monetary Fund (IMF) said Tuesday.
The IMF predicted the global economy will shrink by 3% in 2020, a dramatic change from its prediction in January, when the IMF projected global gross domestic product (GDP) would rise 3.4% this year.
“It is very likely that this year the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago,” Gita Gopinath, the IMF’s chief economist, said in the latest “World Economic Outlook” report.
The latest IMF forecasts projects the U.S. economy will shrink by 5.9% this year, with the Euro Zone contracting by 7.5%. Italy and Spain, where the virus is widespread, are expected to be particularly hard hit, with their economies contracting by by 9.1% and 8%, respectively.