The number of Americans filing claims for unemployment benefits shot to a record high of more than 6 million last week as more jurisdictions enforced stay-at-home measures to curb the coronavirus pandemic, which economists say has pushed the economy into recession.
Thursday’s weekly jobless claims report from the Labor Department, the most timely data on the economy’s health, reinforced economists’ views that the longest employment boom in U.S. history probably ended in March. With a majority of Americans now under some form of lockdown, claims are expected to rise further.
Economists said worsening job losses underscored the need for additional fiscal and monetary stimulus. President Donald Trump last week signed a historic US$ 2.3 trillion package, with provisions for companies and unemployed workers. The Federal Reserve has also undertaken extraordinary measures to help companies weather the highly contagious virus, which has brought the country to a halt.
Initial claims for state unemployment benefits surged 3.341 million to a seasonally adjusted 6.648 million for the week ended March 28, the government said. That was double the previous all-time high of
3.307 million set in the prior week.
The Labor Department said states continued to identify layoffs related to COVID-19 across a broad array of industries, including accommodation and food services, health care and social assistance, manufacturing industries, retail, wholesale trade and construction industries.
“Similar to last week’s unemployment claims numbers, today’s report reflects the sacrifices American workers are making for their families, neighbors, and country in order to slow the spread,” U.S. Labor Secretary Eugene Scalia said in a statement.
The coronavirus pandemic’s disruptive impact was highlighted by a separate report from the U.S. Commerce Department on Thursday showing a collapse in Chinese imports, resulting in the U.S. trade deficit narrowing 12.2% to US$ 39.9 billion in February, the lowest level since September 2016.
Economists believe the US economy slipped into recession in March. The National Bureau of Economic Research, the private research institute regarded as the arbiter of U.S. recessions, does not define a recession as two consecutive quarters of decline in real gross domestic product, as is the rule of thumb in many countries. Instead, it looks for a drop in activity, spread across the economy and lasting more than a few months.
Applications for unemployment benefits peaked at 665,000 during the 2007-2009 recession, when 8.7 million jobs were lost. Unadjusted claims in California soared 692,394 last week. New York, another COVID-19 hot spot, reported an increase of 286,404.