The magnitude of the economic devastation being wrought by the coronavirus pandemic was laid bare on Thursday when the U.S. government reported an unprecedented surge in the number of people seeking jobless benefits.
A total of 3.28 million people filed for unemployment insurance in the week ended March 21, dwarfing previous highs in Labor Department reports published since 1967. Two weeks earlier, before closures of businesses swept across vast swaths of the country, the number stood at 211,000, close to a half-century low.
“This shows the severity of the downturn, and the speed of it,” said Michelle Meyer, head of U.S. economics at Bank of America. “It speaks to the unusual nature of this recession; it is an abrupt plunge into recession versus prior downturns, where the shock has time to multiply. We could have very high numbers continue for the next few weeks.”
Economists’ projections for the figure ranged as high as 4.4 million. Before adjusting for seasonal fluctuations, initial filings were at just under 3 million.
U.S. stocks rallied Thursday at the open, though they’re still down more than 25% from a record high in February.
Claims increased in all 50 states and the District of Columbia, with nine states reporting jumps of at least 100,000 from the prior week, unadjusted state data showed:
- Pennsylvania reported the biggest number of claims, with an estimated 378,900
- California claims rose by 129,200 to 186,800
- In New York state, where approximately half of all known coronavirus cases in the U.S. are located, claims rose by 66,000 to 80,300
- Ohio claims rose to an estimated 187,800
- Illinois claims rose to 114,700
- Florida claims rose to 74,000
- Michigan claims jumped to 129,300
“This morning’s data leaves no doubt that the economy is currently in a recession,” said Matthew Luzzetti, chief U.S. economist at Deutsche Bank.
