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Another 4.4 million US workers filed for unemployment benefits last week as the coronavirus pandemic continued to cause one of the nation’s worst economic downturns, with 26 million people reporting layoffs since the outbreak began.
The longest stretch of employment expansion in US history, which started under former President Barack Obama and created nearly 22 million jobs, has now been fully wiped out amid the pandemic.
A staggering 16 percent of the nation’s entire workforce have sought unemployment benefits since last month, when businesses across the country largely began shuttering to the public, with some laying off entire teams of staff and permanently closing their doors.
However, weekly unemployment filings have remained on a slight decline for three weeks, decreasing from the record-shattering 6.8 million applications filed the week of 28 March.
There is little doubt left among analysts that the US economy plunged into a recession in March.
Now, economists have predicted the unemployment rate could continue rising through April, reaching as high as 20 percent by the end of the month.
“While layoffs and furloughs are likely to continue across a number of industries in coming weeks, we are cautiously optimistic that the peak in layoffs following initial widespread closures has occurred”, said Andrew Hollenhorst, an economist at Citigroup in New York.
Some of the decline in claims has been attributed to a historic $2.3trn fiscal package, which made provisions for small businesses to access loans that could be partially forgiven if they were used for employee salaries.
The US Senate on Tuesday approved $484bn in a fresh relief package, which mainly expands funding for loans to small businesses.
With claims expected to gradually decline in the coming weeks as more small enterprises access funding, attention will shift to the number of people on unemployment benefits rolls.
The so-called continuing claims data is reported with a one-week lag and is considered a better gauge of unemployment. Continuing claims jumped nearly four million to a record 15.97 million in the week of 11 April.
Next week’s continuing claims data will offer some clues on the magnitude of the anticipated surge in the unemployment rate in April. Continuing claims have not increased at the same pace as initial jobless applications.
Economists believed some people thrown out of work because of state-mandated “stay-at-home” orders found employment at supermarkets, warehouses and delivery services companies. They expected the unemployment rate will shatter the post-World War Two records of 10.8 percent touched in November 1982.
