Coronavirus-related unemployment filings have surged by 70,000 as people temporarily lose jobs or see hours reduced from full-time to part-time, according to a Thursday (March 19) Associated Press report.
The number of people applying for unemployment benefits is now at its highest level since 2017 after Hurricane Harvey, the Labor Department said. The quick increase and the total amount of filings have surpassed anything seen in the past 12 months when unemployment sunk to a 50-year low of 3.5 percent.
Economists have forecast that layoffs would escalate in response to the pandemic and associated efforts to contain the spread.
“The more aggressive coronavirus containment measures imposed in recent days involving the near-total shutdown of the retail, leisure and travel sectors in some parts of the country are clearly starting to have a dramatic impact,” said Andrew Hunter, senior U.S. economist at Capital Economics.
Hunter said he anticipates unemployment filings will blow past the 665,000 applications submitted during the 2007-09 Great Recession. Over the coming weeks, more than 1 million people could file for unemployment benefits, he said.
Industry experts are estimating negative economic growth in the April-June quarter. Treasury Secretary Steven Mnuchin said he was originally hoping for a rebounding third quarter followed by a great fourth quarter.
“We are going to get through this,” Mnuchin said. “We are going to destroy this virus and our economy is going to come roaring back better than ever.”
Depending on Congress, relief checks should start going out to people in three weeks, Mnuchin said.
Over 3,600 workers — not counting servers, bartenders, and other restaurant staff — have lost jobs because of COVID-19. Most of the losses were in the entertainment and leisure sectors.
Mnuchin said he expects 20 percent of the population will be jobless if the economic stimulus bill fails. The economic fallout from the pandemic could potentially be worse than the 2008 financial crisis if Congress fails to pass a $1 trillion coronavirus stimulus package.