WASHINGTON: A record 22 million Americans have sought unemployment benefits over the past month, with millions more filing claims last week, almost wiping out all the job gains since the Great Recession and underscoring the toll on the economy from extraordinary measures to control the novel coronavirus outbreak.
The deepening economic slump was also amplified by other data on Thursday, showing manufacturing activity in the mid-Atlantic region plunged to levels last seen in 1980 and homebuilding tumbling by the most in 36 years in March.
The data followed dismal reports on Wednesday of a record drop in retail sales in March and the biggest decline in factory output since 1946. Economists are predicting the economy, which they believe is already in recession, contracted in the first quarter at its sharpest pace since World War II.
“The scale of job losses we have had in the past four weeks is remarkable, nearly all the jobs gained since the great financial crisis are now lost,” said James Knightley, chief international economist at ING in New York. Initial claims for state unemployment benefits dropped 1.370 million to a seasonally adjusted 5.245 million for the week ended April 11, the government said.
Data for the prior week was revised to show 9,000 more applications received than previously reported, taking the tally for that period to 6.615 million. A total of 22.034 million people have filed claims for jobless benefits since March 21, representing about 13.5% of the labour force.
Employment bottomed at around 138 million in December 2010 and peaked at 158.8 million in February. At face value, the staggering claims numbers set the economy on course for job losses of more than 1 million in April.
But a historic $2.3 trillion fiscal package signed by President Donald Trump last month made provisions for small businesses to access loans that could be partially forgiven if they were used for employee salaries.
As such, not all the 22 million people who have so far filed claims will be counted as unemployed when the government publishes its closely watched employment report for April next month. The government surveyed establishments for April’s non-farm payrolls component of the employment report this week.
Economists are divided on whether the second straight weekly decline in claims suggests filings peaked at a record 6.867 million in the week ended March 28, or that overwhelmed state employment offices were unable to process the flood of applications.
Published in The Express Tribune, April 17th, 2020.