3.8 million more Americans file for unemployment benefits
Initial unemployment claims reached a seasonally adjusted total of 3.8 million last week, the sixth straight week that new claims have reached into the multimillions as the coronavirus pandemic wreaks havoc on the U.S. economy.
The new figure brings the six-week total of new claims to more than 30 million, by some estimates one-fifth of the entire American workforce.
The Congressional Budget Office projected that the unemployment rate could peak at 16 percent this quarter and that average unemployment would remain above the Great Recession–level high of 10 percent through 2021. Others are projecting even higher levels, akin to the Great Depression.
The government has poured hundreds of billions of dollars into programs meant to keep people on payrolls through lockdowns and expand unemployment benefits.
An initial $349 billion round of forgivable loans for small businesses that kept paying employees ran out within two weeks, leading Congress to appropriate another $310 billion. The Small Business Administration has already allocated some $90 billion from the second round.
But the total of new claims announced on Thursday was also the fourth in a row showing a decrease after a 6.9 million peak a month ago.
Some economy watchers are hoping that once the initial lockdowns end, a combination of new treatments, testing and contact tracing will help the economy reopen and get people back to work.
But the depth of the economic damage has been severe. Gross domestic product, which measures the size of the economy, fell by an annualized 4.8 percent in the first quarter and is expected to fall much more in the second quarter.
The unadjusted level of initial unemployment claims, which some economists argue is a better gauge of what’s happening in the economy during a crisis, when normal formulas that adjust for seasonal differences may skew the information, was closer to 3.5 million. That would bring the six-week total to around 27.9 million claims.
Some analysts say the figures are undercounting the unemployment level.
A study from the Economic Policy Institute estimated that as many as 12 million more people have not been successful at filing for unemployment benefits because of the huge backlog and have therefore not been counted in the official tally.
“The tens of millions Americans who have lost their jobs in the past six weeks are paying the price for the rest of us—forced to stay home without pay to help slow the spread of the virus and save lives,” said Rep. Don Beyer (D-Va.), the vice chairman of Congress’s Joint Economic Committee.
“Congress must assure these Americans that the federal government will help them survive this public health and economic crisis no matter how long it lasts,” he added.
Updated at 10:16 a.m.
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