Yahoo Finance’s Zack Guzman and Heidi Chung discuss which states are getting hit the hardest, after jobless claims jumped to a record-breaking 6.648 million.

Video Transcript

ZACK GUZMAN: Now the big market number that everyone was bracing for today turning out to be much worse than anticipated. That being the record amount of unemployment claims we've been digging through. The number us 6.648. And for more on that, I want to get to our own Heidi Chung, who tracked the breaking news this morning. And, Heidi, it's nearly double what we saw last week. And that already was a record.

HEIDI CHUNG: Yeah, Zack, it's not looking so good for the labor market. It really seems as if the COVID-19 outbreak is completely decimating the entire market, as we can see now. The market-- excuse me, the number of Americans filing for unemployment benefits spiking to a record breaking 6.648 million for the week ended March 28.

Now consensus expectations were for 3.76 million claims. And the prior week's figure was revised higher to 3.307 million claims from 3.283 million claims. So prior to that week ending march 21, the previous record was for 695,000 claims filed the week ended October 2 of 1982.

So looking at the states that were hit particularly hard this time around, California reported the most initial claims last week at an estimated 879,000 on an unadjusted basis. And that's up from 186,000 in the prior week. Then we had Pennsylvania with an estimated total of about 406,000, up from 377,000 in the prior week as well. New York had 366,000 claims. And Michigan reporting 311,000.

So we are seeing a little bit of a correlation between the states that are reporting the highest infections and the states with the highest claims in the last week. The number is expected to continue to rise from here for a couple of reasons, mostly because the bulk of these actually unemployed have not been able to actually file their claims at all. There's a huge backlog right now as computer systems are crashing, as well as phone lines are being jammed up just due to the influx of people looking to file these unemployment insurance claims.

And I also want to note that previously, the people that were unable to file for employment insurance, such as those that were self-employed as well as independent contractors, are now going to be able to file for these unemployment claims thanks to the CARES Act that was enacted last week.

ZACK GUZMAN: Yeah, I mean, I guess that kind of speaks to, you know, normally, we would be more excited to see the normal jobs report numbers when we look at unemployment and get that update on a monthly basis. But since so much of this is happening in real time, we've been looking to those unemployment claims as kind of the key driver here. Of course, the jobs number is also going to be a little bit muted because that includes back when things were going well right before the coronavirus crisis actually hit. So what should we be expecting when we get that number? And does it even matter as much?

HEIDI CHUNG: Yeah, Zack, so what we're expecting tomorrow when the Bureau of Labor Statistics releases the jobs report for March, economists on the street are expecting 100,000 job losses. And that is following 273,000 job additions in February. And the unemployment rate is expected to have [INAUDIBLE] 3.8% percent, up from 3.5%. And it's important to note here that the weekly jobless claims number is actually the most accurate read that we have in terms of looking at the COVID-19 impact on the labor market in the US economy.

As we mention a lot on this show, a lot of the economic data that we are getting is very backwards looking in nature. And so I need to point out that the survey period for the Household Survey is usually in the calendar week that includes the 12th of the month. And in the Establishment Survey, the reference period is in the pay period, including the 12th of the month. So that may or may not correspond directly to the calendar week, which is why the March figure likely will not capture the entire impact. And we'll have to look to April and May for those numbers.

ZACK GUZMAN: All right, Heidi Chung bringing us the latest there on that front as we continue to see record setting numbers being set on the unemployment claims front. The other thing, too, I just wanted to highlight that I think we have here is looking at the way that the numbers change the estate count, too, when we look at it. Interesting to see the way that we saw some states leading the way last week.

When you look at those, a lot of those key swing states that Trump had won when you look at Pennsylvania, Michigan, Minnesota. Not exactly one that he won. Ohio, one that he won there. But now, the states leading the charge. Georgia, Alabama, and Mississippi seeing the largest percentage gain in terms of unemployment claims. Kind of a different story there since those are states that we hadn't necessarily seen get hit as hard as the neighboring state of Louisiana when we look at how that state saw large upticks in unemployment last week.

But then you look to states like Texas, one of those high population states. And that's another one where I would be curious to get your guys' take on this, too. Because when you look at it, I mean, Texas-- only yesterday did the governor actually come out and say we were going to do a shelter in place order. Though he stopped short of actually wanting to refer to it as a shelter in place order.

And even that state, when you look at the numbers, hasn't necessarily been hit as hard as California and New York in terms of the spike to unemployment there so far. So you do wonder how much worse this could get when we think about what could be coming down the pike for a state like Texas as they do shift to telling people to stay at home.

HEIDI CHUNG: Right, Zack, so there's a bit of a lag in terms of the unemployment claims that are being filed in terms of when we look at the timeline. So like you mentioned, now that Texas has enacted that shelter in place mandate, we're now going to see the restaurants start to close, the bars start to close. So now those folks that are being laid off and furloughed will be filing next week and the week after that.

So we're going to start to see an influx of these files being-- or these claims being filed for weeks and weeks, and perhaps months to come. It really depends on how long these mandates stay in place. But, yeah, there's no timeline in terms of when we'll start to see a sort of recovery. But, for now, it looks like things are going to get much worse.

ZACK GUZMAN: All right, so not exactly any reason to suspect so far that we're out of the woods by any means. And, of course, we're continuing to track the cases, which, of course, would not indicate that we are out of the woods yet either. But for that update on unemployment claims, Heidi Chung, thank you for bringing us that.