In another sign that the nation’s economy is suffering amid the COVID-19 pandemic, the number of new jobless claims reached record levels last week, double the pace set a week ago, the U.S. Department of Labor reported on Thursday (April 2).
For the week ending March 28, the seasonally adjusted number of initial claims was 6.6 million, up from 3.3 million from the previous week’s revised level. This marks the highest level of seasonally adjusted initial claims in the history of the seasonally adjusted series. The previous week’s level was revised up by 24,000 from 3,283,000 to 3,307,000.
“More than any other economic data point, the unprecedented and massive level of more than 6.6 million new jobless claims captures the recent, heartbreaking financial devastation related to the coronavirus outbreak and measures aimed at containing it,” said Mark Hamrick, senior economic analyst for Bankrate in a statement. “That’s aside from the toll related to illness and death.”
The Labor Department said nearly every state providing comments to the agency cited the COVID-19 outbreak. States continued to identify jobless increases related to the accommodation and food service industries. But the states said there’s a wider impact across industries. Many states continued to cite the healthcare and social assistance, and manufacturing industries, while an increasing number of states identified the retail and wholesale trade and construction industries. That's bad news for small- and medium-sized businesses.
All states reported increases in initial claims for the week ending March 21. The largest increases were in Pennsylvania (+362,012), Ohio (+189,263), Massachusetts (+141,003), Texas (+139,250), and California (+128,727), while the smallest increases were in the Virgin Islands (+79), South Dakota (+1,571), West Virginia (+2,671), Vermont (+3,125), and Wyoming (+3,136).
Hamrick said it’s important to note that furloughed workers, not just those whose jobs have been cut, are among those filing for unemployment assistance.
“We hold onto the hope that many of these individuals will be able to return to their jobs once stay-at-home orders are lifted, consumers venture out and the peak in infection is behind us,” said Hamrick.
The latest numbers confirm data out Wednesday from Moody's Analytics and payroll-processing firm ADP, which showed a big jump in job losses for private-sector employers. Boston Federal Reserve President Eric Rosengren also warned later Wednesday that he expected the U.S. jobless rate to "rise dramatically."
Further bad news for the U.S. job market will likely come Friday morning, when the Labor Department reports on the jobs picture for March as a whole. Analysts are expecting the report to show that the U.S. economy lost some 100,000 nonfarm jobs in March after adding 273,000 in February. They also forecast the unemployment rate to hit 3.8 percent vs. March's 3.5 percent, which tied a 50-year low.
However, Friday's report will only document the early phases of what's expected to be a bloody U.S. economic downturn. Bank of America released research Thursday predicting that that U.S. jobless rate could eventually hit 15.6 percent.