Stunning. Breathtaking. Unprecedented.
Words usually associated with a movie, a work of art, an NFL upset are now being used by economists to describe unemployment claims. When the U.S. Department of Labor on Thursday released its weekly number of new unemployment insurance claims it was expected to be unparalleled. Congress’ Joint Economic Committee warned that numbers could range from 2.25 million, Goldman Sachs’ prediction, to 3.4 million, the Economic Policy Institute’s prediction.
In the week ending March 21, seasonally adjusted initial claims were 3.28 million nationwide, the highest level of seasonally adjusted initial claims in the history of the series. The previous high was 695,000 in October 1982, the Labor Department noted. States cited service industries as most affected by initial unemployment claims, followed by increases in health care, social assistance, arts, entertainment and recreation, transportation, and warehousing and manufacturing industries.
“I have been a labor economist for a very long time and have never seen anything like this,” said EPI’s Heidi Shierholz in a statement. “We just got the first piece of government labor market data that really shows—in a breathtaking manner—the impact the coronavirus shock is having on the labor market.”
Initial unemployment claims jumped from 211,000 nationwide three weeks ago to 282,000 two weeks ago to nearly 3.3 million last week, a 15-fold increase in two weeks.
“This shows why the economic rescue package that the Senate passed is so important to try to help people get through this period as best they can,” said Erika Rosenberg, president and CEO of the Center for Governmental Research Inc. “With the tremendous economic slowdown, there’s going to be a lot of people really struggling to meet their basic needs. I think one of the most troubling things about the economic impact is that it’s going to hit low-wage workers harder. People who are working in retail, people who are working in restaurants, people who are doing gig jobs, those are the things that are at a complete standstill now.”
EPI estimates that some 14 million workers will lose their jobs due to the COVID-19 pandemic by summer, with significant losses in every state.
Congress’ Joint Economic Committee in a statement ahead of Thursday’s DOL release said if the number of new claims is as high as predicted and if it remains high in the coming weeks, unemployment will skyrocket.
“For example, if 3 million new claims are reported Thursday, it would mean a 1.8 percentage point spike in unemployment—in just one week,” said committee Vice-Chair U.S. Congressman Don Beyer, D-Va., in the statement.
At that rate, unemployment would more than triple in less than a month and would “quickly exceed the 10 percent peak in 2009 during the Great Recession,” Beyer said.
Bloomberg this week reported that Federal Reserve Bank of St. Louis President James Bullard predicts the unemployment rate could reach 30 percent in the second quarter of this year, higher even than the 24.9 percent unemployment at the height of the Great Depression.
Some 80,000 people in New York state filed initial claims for unemployment insurance during the week ended March 21, compared with about 14,000 the week before. Estimates from Pennsylvania are that nearly 380,000 people filed claims last week, up from roughly 15,500 the previous week, and California reported that 564,000 workers filed for initial unemployment benefits last week.
The congressional economic committee suggested that the unemployment claims report understates the severity of the problem
“The jobless numbers only reflect the number of claims that are actually filed and do not include workers who intended to file claims but were unable to due to jammed offices and phone lines; or websites that were unable to process their claims,” Beyer said in the statement. “Others are out of work, but not eligible to file. In addition, there are 1.1 million workers who were already long-term unemployed before the coronavirus crisis began.”
To address those issues locally, the County of Monroe has opened an online job portal through RochesterWorks for essential businesses that are looking for workers and individuals looking for jobs to connect. The effort is being conducted in cooperation with the Greater Rochester Chamber of Commerce Inc. and Greater Rochester Enterprise Inc.
“RochesterWorks is proud to work with our primary partner, the County of Monroe and the county executive, to provide our local employers the opportunity to pose very efficiently their current employment openings, especially those in response to COVID-19,” RochesterWorks Executive Director Peter Pecor said in a statement Wednesday. “We have a local talent pool ready and able to fill those positions identified and connected through our online tools.”