Coronavirus-driven unemployment claims surpass 30 million
Americans filed 3.8 million new jobless claims last week, the Labor Department reported Thursday, pushing the six-week claims tally to 30.3 million as the coronavirus pandemic battered the economy.
The new report, which covers the week ending April 25, likely understates the total number of Americans who lost their jobs as the death toll from the disease climbed above that of the Vietnam war.
Self-employed workers who were made temporarily eligible last month for jobless benefits under the CARES Act are mostly left out of the count, as only 21 states have updated their systems to begin cutting unemployment checks to those workers. Eleven of those states implemented the program in just the past week.
“As states begin the process of reopening and Americans return to work, today’s unemployment report reflects once again the hardship caused by the coronavirus pandemic," Secretary of Labor Eugene Scalia said in a statement. DOL has disbursed more than $750 million to assist states responding to the massive influx of claims, he said.
Florida reported the greatest number of new claims, with an estimated 432,465 applications processed last week. California followed with 328,042 new claims.
The coronavirus pandemic has wreaked havoc on the economy as businesses across the country shut down and millions of workers were laid off or forced to stay at home.
“The summer is going to be brutal,” said Stephen Moore, an outside economic adviser to President Donald Trump and member of his council to reopen the country. “I don’t think people understand how bad it’s going to be.”
Moore predicted that U.S. would continue to see a run of bad unemployment numbers and business failures throughout much of the summer, even as states begin to gradually lift their restrictions.
The new figure reported by DOL today suggests that roughly 18 percent of workers who were employed in mid-March have lost a job since then, according to Indeed Hiring Lab's director of economic research Nick Bunker.
"More than 1 in 6 workers have filed for UI since the coronavirus hit the United States, and 10.7 [percent] of the working-age population has lost a job," he said. "These numbers are staggering, but the reality of joblessness is even more dire."
Other measures of the economy are sending an equally grim message.
The Commerce Department reported Wednesday that the U.S. economy shrank at a 4.8 percent annual rate last quarter, which ended March 31, the sharpest one-quarter fall since the Great Recession, when GDP dropped 8.4 percent during the last three months of 2008.
Ian Shepherdson, chief economist at Pantheon Macroeconomics warned that GDP could plunge more than 30 percent in the next quarter, which spans April to June.
Goldman Sachs economists estimated that the pandemic will drive down incomes roughly 3 percent in 2020.
The coronavirus’ damage to the labor market will be clearer when the Bureau of Labor Statistics releases its monthly employment report for the month of April next week. Economists expect that number to be close to 20 percent.
