April opened with millions of people out of work and stock markets slumping after the White House acknowledged that the coronavirus could kill hundreds of thousands of Americans. It’s a preview of the carnage to come.
What We Know:
- Some 6.6 million Americans filed for unemployment benefits last week, the Department of Labor said Thursday, double the number of applications reported last week and 10 times the previous weekly record set in 1982. As many as 20 million people could be out of work this summer, according to separate estimates from the Economic Policy Institute and Bank of America.
- The number shatters last week’s then- record high of 3.3. million claims. Filings for unemployment aid generally reflect the pace of layoffs.
- In March, 3 million more workers applied for unemployment than the total number of people who found jobs in the first three years of the Trump presidency. “If all of the near 10 million people who filed claims in the past two weeks are classified as unemployed in April’s employment report, then the unemployment rate would hit 10.1%, which would slightly exceed the peak a decade ago in the aftermath of the [Great Financial Crisis],” Paul Ashworth of Capital Economics wrote in a report.
- While 10 million is a staggering figure, it almost certainly underestimates the number of people who have lost work in recent weeks. That’s because the volume of applicants has been so high that they are simply overwhelming states’ unemployment systems.
- “We definitely understand that processing will probably be longer than normal because of everyone applying right now, but the least they could do is send an email,” Florida resident, Iris Bonet said. “It doesn’t leave much confidence.”
- Congress significantly expanded the unemployment benefits system in last week’s $2.2 trillion economic rescue package. That legislation added $600 a week in jobless aid, on top of what recipients receive from their states. This will enable many lower-income workers to manage their expenses and even increase their purchasing power and support the economy.
- The legislation will also help fund unemployment benefits for workers whose hours have been cut. That would enable these people to replace some of their lost income with unemployment aid even as they keep their jobs.
Typically, people who receive jobless aid are required to actively look for a new job and document their searches. But Congress has passed other legislation that encourages states to drop that requirement, given that so many businesses are closed, and most Americans have been ordered to stay mostly at home.