Weekly Unemployment Claims Soar to 6.6 Million

By:
Chris Gaetano
Published Date:
Apr 2, 2020

The Department of Labor reports that more than 6.6 million people filed new claims for unemployment benefits during the week ending March 28, double the record-setting number for the previous week. The latest figure brings the two-week total to nearly 10 million. According to the New York Times, there is no precedent for this speed and scale of job losses. 

And that previous 3.3 million figure might actually be too low, according to MarketWatch. This is because not everyone who lost their jobs got the chance to apply for unemployment benefits by the time the statistics were compiled, mainly due to computer systems crashing amid unprecedented loads.

What's more, California has reported figures far in excess of what the federal government was saying during its writeup, saying that there were 1.3 million new jobless claims for the week ending March 21, rather than the  200,000 for that state claimed by the Labor Department. Economists polled by MarketWatch estimate that the real nationwide figure for that week could be as high as 5 million. Given the continued market chaos threatening to collapse the economy, it is highly like that the next set of figures will be similarly grim.

It is for this precise reason that the CARES Act dramatically expands unemployment benefits both in terms of amount and who can qualify. Generally, those eligible—which now include the self-employed, gig workers and part-time workers among many others—will get an additional $600 on top of their normal unemployment benefits for the next 39 weeks. While on paper this seems simple, actually implementing the program might prove challenging. CNBC is reporting that the formerly ineligible are confused as to how they should apply for unemployment benefits, but state governments are just as much in the dark as they are. Because these types of workers previously never qualified for unemployment, agencies never developed procedures for how they can do so now.

The St. Louis Federal Reserve last week estimated that the country may see unemployment reach 32 percent by the end of the second quarter. This is far higher than even the grim prediction of 20 percent that Treasury Secretary Steven Mnuchin expressed in private to lawmakers in mid-March. The highest rate if unemployment during the Great Depression was 24.9 percent.

For more on the unemployment provisions, one can read the bill itself or the analysis recently posted in the Trusted Professional.

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