Record 16.8 million have sought jobless aid in just 3 weeks
The figures collectively constitute the largest and fastest string of job losses in records dating to 1948. By contrast, during the Great Recession it took 44 weeks — roughly 10 months — for unemployment claims to go as high as they now have in less than a month.
The damage to job markets is extending across the world. The equivalent of 195 million full-time jobs could be lost in the second quarter to business shutdowns caused by the viral outbreak, according to the United Nations’ labor organization. It estimates that global unemployment will rise by 25 million this year. And that doesn’t even count workers on reduced hours and pay. Lockdown measures are affecting nearly 2.7 billion workers — about 81 percent of the global workforce — the agency said.
Around a half-billion people could sink into poverty as a result of the economic fallout from the coronavirus unless richer countries act to help developing nations, Oxfam, a leading aid organization, warned Thursday.
In the United States, the job market is quickly unraveling as businesses have shut down across the country. All told, in the past three weeks, 16.8 million Americans have filed for unemployment aid. The surge of jobless claims has overwhelmed state unemployment offices around the country. And still more job cuts are expected.
It’s as if “the economy as a whole has fallen into some sudden black hole,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics. Many Wall Street analysts concede that at this point, forecasts are not much more than gussied-up guesses: The purposeful and sudden halt in economic activity has no precedent, and no one knows when the restrictions on movement and commerce will be lifted.
Given the current information, though, several economists expect that by the end of the month, more than 20 million people will have been thrown out of work, pushing the unemployment rate toward 15%. In February, it was 3.5%, a result of 113 consecutive months of job growth. The next employment report will be released in May.
The viral outbreak is believed to have erased nearly one-third of the U.S. economy’s output in the current quarter. Forty-eight states have closed nonessential businesses.
A nation of normally free-spending shoppers and travelers is mainly hunkered down at home, bringing entire gears of the economy to a near-halt. Nongrocery retail business plunged 97% in the last week of March, compared with a year earlier, according to Morgan Stanley. The number of airline passengers screened by the Transportation Security Administration has plunged 95% from a year ago. U.S. hotel revenue has tumbled 80%.
Applications for unemployment benefits are a rough proxy for layoffs because only people who have lost a job through no fault of their own are eligible.
The wave of layoffs may be cresting in some states even while still surging in others. Last week, applications for jobless aid declined in 19 states. In California, they dropped nearly 13% to 925,000 — still a shockingly high figure. In Pennsylvania, they dropped by nearly one-third to 284,000. That’s still more than the entire nation experienced four weeks ago.
By contrast, in Georgia, which issued shutdown orders later than most other states, filings for unemployment claims nearly tripled last week to 388,000. In Arkansas, they more than doubled. In Arizona, they jumped by nearly 50%.
Despite feverish efforts in many states to expand staffing and upgrade technological capacity, unemployment offices have been overpowered by demand. Applicants in several of the hardest-hit places, like New York and California, say they’ve made dozens of attempts — even hundreds — to get through online or by telephone.
Florida and Texas, which together account for 15% of the nation’s payrolls, decided midweek to close nonessential businesses. As a result, the spike in claims in those states may not show up in the Labor Department’s report until next week.
On Thursday, the Federal Reserve intensified its efforts to bolster the economy with a series of lending programs that could inject up to $2.3 trillion into the economy.
In many European countries, government programs are keeping people on payrolls, though typically with fewer hours and lower pay. In France, 5.8 million people — about a quarter of the private-sector workforce — are now on a “partial unemployment” plan: With government help, they receive part of their wages while temporarily laid off or while working shorter hours.
A similar system is in place in Germany, where the federal labor agency says 650,000 firms have registered to put people in the short-time work program and so still on payrolls. That’s up from 470,000 about 10 days earlier.
PREVIOUS ARTICLE
