First-time claims for unemployment benefits soared to a second straight record last week, reflecting what one economist called the “tectonic shift” in the labor market caused by the coronavirus crisis.
The Labor Department reported Thursday that 6.64 million Americans filed for benefits in the week ended March 28 — the most since the government began collecting the data in 1967 and double the previous week’s 3.3 million.
Since the pandemic began last month, forcing businesses to lay off and furlough workers, jobless claims have surged more than 3000%.
“In one line: No words for this,” Pantheon Macroeconomics Chief Economist Ian Shepherdson wrote in reaction to the numbers.
According to Citi economist Andrew Hollenhorst, roughly 6% of America’s 165 million strong work force have filed claims in the past two weeks, implying a 9.5% unemployment rate. The March jobs report is due on Friday but the survey it is based on concludes around the middle of the month.
“The total job losses in just two weeks — almost 10 million Americans — amounts to a staggering, sudden blow to American workers never seen before in the U.S. economy,” Politico said. “The labor market in the coming weeks could blow past the 15 million jobs lost at the peak of the 18-month Great Recession from 2007 to 2009.”
Before the coronavirus outbreak, weekly first-time claims had been hovering in the low 200,000s. This “tectonic shift” in the labor market “implied a real-time unemployment rate of 10.1% at a minimum,” said Joseph Brusuelas, chief economist at RSM.
Goldman Sachs is forecasting that the unemployment rate will spike to 15% in the second half of the year.
The largest number of new claims last week was in California, which processed an estimated 878,727 claims — up from 186,333 in the previous week and more than 21 times the state’s typical pre-pandemic volume.
“The economy and the labor market will bounce back once the crisis is over,” Glassdoor economist Daniel Zhao told Business Insider. “The question is really when, exactly, and how quickly. Once people start getting back to work, will everybody be able to find a job again?”