The Department of Labor reported Thursday that weekly jobless claims soared to a record 3.28 million this week as businesses shut down to slow the spread of coronavirus — the most jobless claims in history and double what experts predicted just last week.
“U.S. weekly jobless claims for the week ending March 21 totaled 3,283,000, the Labor Department reported Thursday, exceeding the consensus analyst forecast of 1.5 million. That was up from 281,000 in the previous week, which already marked a two-year high,” according to Business Insider. “The latest number is by far the largest on record for a single week, exceeding the record of nearly 700,000 newly filed jobless claims set in 1982.”
Prior to the coronavirus lockdown, initial jobless claims were hovering around 200,000 weekly, reflective of a strong job market, analysts said at the time. The effects of coronavirus, however, were swift and dramatic, and the virus has impacted “virtually every industry and business model around,” per CNN.
“Most historical comparisons of this scale are inadequate.The closest would be natural disasters like major hurricanes. However, as today’s report shows, the coronavirus outbreak is economically akin to a major hurricane occurring in every state around the country for weeks on end,” one economic expert told the network.
The figure, Business Insider says, could be even higher than the recorded 3.28 million. Many of those left jobless by the coronavirus lockdown are small business owners, sole proprietors, service industry workers who rely on tips, and workers in the gig economy — none of whom are eligible to file for unemployment insurance or qualify for unemployment benefits.
“196 million people have been urged to stay home. Not all employers can keep paying them,” a University of Michigan public policy professor told the outlet. “Many are not permanently unemployed, but temporarily furloughed. Initial claims of 3.28 million is such a small fraction of 196 that I think we have a lot more to come next week.”
Late Wednesday night, the Senate passed a $2 trillion coronavirus stimulus relief package, which would allow workers who don’t typically qualify for unemployment to apply for temporary benefits, but the House has yet to review the bill and may not get to a vote until Friday at the earliest, leaving millions without the ability to access emergency funds.
The Labor Department has also reportedly encouraged states to expand their unemployment benefits as well, so that gig workers and small business owners can apply for benefits.
Treasury Secretary Steve Mnuchin was hopeful, in an interview with CNBC Thursday morning, that the spike in jobless claims would be temporary, given that the coronavirus relief package is now moving through Congress, and that the shutdown is expected to be temporary: “hopefully [businesses[ will be able to hire back a lot of those people.”
Experts predict that, regardless of any swift changes, the shutdown’s economic impact may be long-term.
“[E]conomists are expecting millions of job losses in the coming weeks,” according to CNN, and many also believe that the U.S. economy will “fall into a recession in the second quarter, before staging a comeback later in the year after the spread of the virus slows.”