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Another 3.2 Million File Unemployment Claims

More than 33 million people have filed for benefits since the coronavirus shutdowns started

HIALEAH, FLORIDA - APRIL 08: Eddie Rodriguez, who works for the City of Hialeah, hands out unemployment applications to people in their vehicles in front of the John F. Kennedy Library on April 08, 2020 in Hialeah, Florida. The city is distributing the printed unemployment forms to residents as people continue to have issues with access to the state of Florida’s unemployment website in the midst of widespread layoffs due to businesses closing during the coronavirus pandemic. (Photo by Joe Raedle/Getty Images)
Eddie Rodriguez hands out unemployment applications to people in their vehicles in front of the John F. Kennedy Library in Hialeah, Florida.
Joe Raedle/Getty Images

Nearly 3.2 million laid-off workers applied for unemployment benefits last week as the business shutdowns caused by the viral outbreak deepened the worst U.S. economic catastrophe in decades.

Roughly 33.5 million people have now filed for jobless aid in the seven weeks since the coronavirus began forcing millions of companies to close their doors and slash their workforces. That is the equivalent of 1 in 5 Americans who had been employed back in February, when the unemployment rate had reached a 50-year low of just 3.5 percent.

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The Labor Department's report Thursday suggests that layoffs, while still breathtakingly high, are steadily declining, after sharp spikes in late March and early April. Initial claims for unemployment aid have now fallen for five straight weeks, from a peak of nearly 6.9 million during the week that ended March 28.

Applications for jobless aid rose in just six states last week, including Maine, New Jersey and Oklahoma, and declined in the 44 others.

The report showed that 22.7 million people are now receiving unemployment aid — a rough measure of job losses since the shutdowns began. That figure lags a week behind the figures for first-time unemployment applications. And not everyone who applies for jobless aid is approved. The number of laid-off workers receiving aid is now equal to 15.5 percent of the workforce that is eligible for unemployment benefits.

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Those figures are a rough proxy for the job losses and for the unemployment rate that will be released Friday, which will likely be the worst since modern record-keeping began after World War II. The unemployment rate is forecast to reach 16 percent, the highest rate since the Great Depression, and economists estimate that 21 million jobs were lost last month. If so, it would mean that nearly all the job growth in the 11 years since the Great Recession ended has vanished in a single month.

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Many people face difficulty applying for benefits

Even those stunning figures won't fully capture the magnitude of the damage the coronavirus has inflicted on the job market. Many people who are still employed have had their hours reduced. Others have suffered pay cuts. Some who lost jobs in April and didn't look for a new one in light of their bleak prospects won't even be counted as unemployed. A broader measure — the proportion of adults with jobs — could hit a record low.

The official figures for jobless claims may also be undercounting layoffs. Surveys by academic economists and think tanks suggest that as many as 12 million workers who were laid off by mid-April did not file for unemployment benefits by then, either because they couldn't navigate their state's overwhelmed systems or they felt too discouraged to try.

As the economy slides further into what looks like a severe recession, economists are projecting that the gross domestic product — the broadest gauge of economic growth — is contracting in the current April–June quarter by a shocking 40 percent annual rate. As it does, more layoffs appear to be spreading beyond frontline industries like restaurants, hotels and retail stores.

GE Aviation, for example, has said it is cutting up to 13,000 jobs. Uber will shed 3,700 positions. MGM Resorts International has announced that the furloughs of more than 60,000 employees could turn into layoffs.

But the job cuts have hammered workers at restaurants, hotels and retail firms particularly hard. According to the payroll processor ADP, about half the total jobs in the hotel and restaurant industry — 8.6 million — disappeared in April, based on data from its corporate clients. A category that includes retail and shipping shed 3.4 million workers.

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As businesses across the country have shut down and laid off tens of millions, the economy has sunk into a near paralysis. Even as some businesses are beginning to reopen in certain states, factories, hotels, restaurants, resorts, sporting venues, movie theaters and many small businesses are still largely shuttered. Home sales are falling. Consumer confidence and spending are sinking.

How unemployment is measured

The difference between the 30 million–plus unemployment claims that have been filed in the past several weeks and the expected April job loss of slightly more than 20 million reflects differences in how the figures are compiled.

The government calculates job losses by surveying businesses and households. It's a net figure that also counts the hiring that some companies, like Amazon and many grocery stores, have done. By contrast, the total jobless claims are a cumulative figure; they include applications for unemployment aid that began in mid-March.

In addition, the government conducts its surveys for the monthly jobs report in the middle of each month. So layoffs from the final two weeks of April won't show up in Friday's jobs report. They will instead be included in the May jobs report, to be released in early June.

After problems with state computer systems had slowed the distribution of federal benefits for many laid-off workers, all 50 states are now paying the $600 extra weekly benefit that the federal government included in a relief package enacted in late March. That represents a significant help to millions of laid-off workers, many of whom still remain anxious and uncertain.

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