3.3 Million File for Unemployment, Blowing Past Previous Records by Miles

By:
Chris Gaetano
Published Date:
Mar 26, 2020
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The federal government has reported that number of seasonally adjusted initial unemployment claims last week totaled about 3.3 million, completely shattering the previous record of 695,000, which was set in 1982. This represents a sharp contrast to the week before, which saw just 282,000 initial claims. The unadjusted data was only a little better: The advance number of actual initial claims under state programs, unadjusted, totaled 2,898,450 in the same time period, an increase of 1,052 percent from the previous week's figures. Last year at this time, there were 190,023 claims.

The government said that nearly every state providing figures cited COVID-19 as the main reason. Particularly hard hit has been the service industry, particularly food and accommodation services, although health care and social assistance; arts, entertainment and recreation; transportation and warehousing; and manufacturing also reported heavy losses.

New York state saw 80,334 initial jobless claims, after seeing 14,272 the previous week.

This result is far beyond even the 2.25 million that Goldman Sachs had initially predicted. However, while the scale might be surprising, reports of mass layoffs have already been making headlines. While Labor Secretary Eugene Scalia conceded that this is a very large increase, he noted in a statement that the stimulus bill approved by the Senate recently expands unemployment benefits, provides direct cash payments to most Americans, and gives aid to small businesses to maintain payroll, "so that, as soon as possible, we can spring back to the strong economic conditions we enjoyed just weeks ago.”

Stock markets, however, largely shrugged at the news, as CNBC reported that the Dow had already gained 640 points this morning, the S&P 500 had risen by 3 percent, and the Nasdaq had risen by 2.6 percent, which could potentially lead to the first time in a weeks that we've seen three straight gains in a row. This is largely because of news of the upcoming stimulus bill and its myriad measures to blunt the pandemic's economic impact.

This might change in the future, however. The Economic Policy Institute, a think tank, predicted that the United States could shed 14 million jobs by the summer, even assuming that there will be $1 trillion in stimulus aid (the legislation approved by the Senate is for about $2 trillion). The institute's analysis estimates that New York, in particular, could lose about 10 percent of its jobs overall by the summer, and about 22 percent of leisure, hospitality and retail jobs. The hardest hit state, according to its model, would be Nevada, which could lose 14 percent of its jobs overall and 40 percent of its leisure, hospitality and retail jobs. In private remarks to Senators, Treasury Secretary Steven Mnuchin said that the country might face 20 percent unemployment in certain scenarios.

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