A further 3.2 million Americans sought unemployment benefits last week as the economic toll from the coronavirus pandemic continued to mount.
The new applications brought the total number of jobless claims since mid-March to 33.3 million- or about 20% of the US workforce.
The number of new claims reported each week by the Department of Labor has subsided since hitting a peak of 6.9 million in March.
But they remain extraordinarily high.
And the number of people collecting benefits has continued to rise, despite recent moves to start re-opening in some parts of the country.
“The significant rise in continuing claims … is a little disappointing since it suggests few people are being recalled to work,” said Paul Ashworth, chief US economist at Capital Economics.
Companies such as Uber, Lyft and Airbnb are amongst the firms that have announced cuts in recent weeks, as shutdowns halted significant amounts of travel.
The impact has been felt across the economy, affecting medical practices, restaurants and administrative workers among many others.
Economists say the monthly unemployment rate for April, which will be released on Friday, is likely to reach 15% or higher.
Just two months ago, the unemployment rate was at 3.5%, a 50-year low.
Since the coronavirus has taken hold in the US, the country has suffered its worst growth numbers in a decade, the worst retail sales report on record and declines in business activity not seen since the 2008 financial crisis.
Meanwhile, weeks of elevated unemployment claims have far surpassed the prior record of 700,000.
Food pantries have seen spikes in demand, and homeowners and renters have delayed monthly payments.
The National Multifamily Housing Council – an industry group for apartment owners – reported last month that nearly a third of renters did not make their full payment by the first of the month.
“If nothing else changes and evictions continue as normal, this public health crisis will turn into a full blown homelessness crisis,” said Matthew Desmond, a sociology professor at Princeton University who runs the Eviction Lab project.
‘All of my business has been cancelled’ – Steve Becker, photographer, 62, Chicago
All of my business has been cancelled – I’ve had no work since February. I’m a corporate photographer, and businesses aren’t doing corporate events right now, and school graduations have been delayed. I’ve had about 15 jobs cancelled.
My work normally happens in the spring and fall – a lot of corporations don’t have events over the summer, so I only have about seven months to make my income. I have some events scheduled for October, but it’s not clear whether they’re going to go ahead.
I haven’t gotten my stimulus cheque yet – I don’t know why. I had applied for unemployment, but was told I didn’t qualify – it’s complicated because I’m an employee of my own company, but don’t pay myself until mid-year or the end of the year. Fortunately my partner works.
I do miss my work – I’m very blessed I was able to do what I enjoy and make a good living out of it. It takes a lot of perseverance, and I miss going out and talking to people.
Reporting by Helier Cheung
Economists are hoping the pain will ease as businesses gradually restart.
Retailers such as Gap have already announced plans for re-opening some stores. Others, including J Crew and department store Neiman Marcus, have been pushed into bankruptcy.
Moody’s Investors Service has predicted that the unemployment rate could fall back to 7% by the end of the year, but that forecast depends on the virus. The longer the shutdown persists, the harder it will be for the economy to rebound.
“If the US does not contain the pandemic and the economy remains shut beyond the second quarter, the unemployment rate would rise further … and many of the job losses that we currently view as temporary would likely become permanent,” the firm’s analysts said.
Published at Thu, 07 May 2020 18:51:07 +0000