U.S. weekly jobless claims soared for a third straight week as the coronavirus pandemic effectively wiped out all the jobs added to the economy since the Great Recession.
The Labor Department reported Thursday that 5.2 million Americans filed first-time claims for unemployment insurance in the week that ended April 11.
Claims came in below the record of 6.615 million for the week of April 4 but brought the four-week total to a record 22.03 million since social distancing measures took effect. The economy had added 22 million jobs since the Great Recession.
“We wiped that out so fast,” Heidi Shierholz, a senior economist at the Economic Policy Institute, told Business Insider. “It’s mind-boggling.”
Economists believe jobless claims will decline as the coronavirus outbreak subsides and states weigh reopening the economy. “Claims are now falling, having peaked … two weeks ago,” Ian Shepherdson, economist at Pantheon Macroeconomics, told The Wall Street Journal. “But the weekly level is still almost unfathomably high.”
The latest report also suggests job losses are broadening out across industries, spreading beyond leisure, service, the arts, and restaurants to the manufacturing, healthcare, construction, transportation, and warehousing sectors. Seven states reported a high number of claims among administrative workers.
That was “a little disturbing,” Daniel Alpert, a creator of the US Private Sector Job Quality Index, said as it indicates that layoffs are moving beyond frontline workers immediately cut from jobs at businesses deemed nonessential.
California led the way last week with 2.8 million claims, representing 14.5% of the state’s labor force. The next-highest totals were in Pennsylvania at 1.3 million, or 19.8% of workers, and New York at 1.2 million, or 12.4% of the labor force.
The total claims over the past month reflect a 13.5% drop in household employment, according to Paul Ashworth, chief U.S. economist at Capital Economics, who expects the April jobless rate to be 15%-20%.
“Nevertheless, we do still expect the unemployment rate to come down much more quickly than during a normal economic recovery, as temporary layoffs return to work once the lockdowns are lifted, so we still wouldn’t characterize this as a depression-type event,” he told CNBC.