Coronavirus

COVID-19 Triggers Record-Breaking Spike In US Unemployment Claims

coronavirus, unemployment, US Department of Labor

A record 3.28 million people claimed U.S. unemployment benefits last week as the coronavirus continued to make its way throughout much of the world, shuttering businesses and reducing incomes, the U.S. Department of Labor reported Thursday (March 26). That’s a 3 million increase from the week before.

“This marks the highest level of seasonally adjusted initial claims in the history of the seasonally adjusted series. The previous high was 695,000 in October of 1982,” the Labor Department said in releasing the numbers.

The agency said initial claims for unemployment benefits rose in all states, with almost all of them pointing to the coronavirus pandemic as the cause. California had the largest increase, followed by Washington state, Nevada and Pennsylvania.

The industries most heavily affected included food services, transportation, entertainment and recreation, among others.

Mark Hamrick, senior economic analyst at Bankrate.com, said that “this explosion of first-time claims for unemployment benefits, topping 3 million, demonstrates the toll unprecedented efforts to contain the deadly coronavirus outbreak take on the job market. While the record number of claims is shocking, it is not totally surprising. For days now, we’ve heard how state systems were overwhelmed by the rush to file claims as people were thrown out of work.”

Still, U.S. stock futures, which had been down before the numbers came out, actually improved a bit following the report’s release.

For instance, Dow Jones Industrial Average futures rose from 20,645 (-381 points) just before the release to 20,710 (-316 points) shortly afterward and kept on rising from there. The Dow opened higher an hour after the report came out and was up a sharp 826 points, or 3.9 percent, at 22,026.84 by 10:30 a.m. ET.

Still, the Dow and other major market indexes around the world have tumbled since the coronavirus outbreak began to sweep the West, as this chart shows:

coronavirus impact chart

For an in-depth analysis of the pandemic’s economic impacts to date, check out PYMNTS’ special COVID-19 coverage here.

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