Another 3.2 Million File Unemployment Claims

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.

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.