A record 3.3 million people filed claims for unemployment in the US last week, the Labor Department said Thursday, as restaurants, hotels, barbershops, gyms and more shut down in a nationwide effort to slow the spread of the deadly Covid-19 pandemic.

Last week saw the biggest jump in new jobless claims in history almost five times beating the previous record of 695,000 claims filed the week ending 2 October 1982.

According to the labor department, the number of new jobless claims filed by individuals seeking unemployment benefits rose from 281,000 the previous week to 3.28 million today.

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Many economists say this is the beginning of a massive spike in unemployment that could result in over 40 million Americans losing their jobs by April.

Layoffs skyrocketed after President Trump declared that no more than 10 people should gather together at a time, effectively forcing restaurants and other public places to close. But many health experts say it is necessary to keep people home to slow the spread of the virus and prevent people from dying.

The surge in weekly applications was a stunning reflection of the damage the viral outbreak is inflicting on the economy. Layoffs are sure to accelerate as the U.S. economy sinks into a recession.

us unemployment covid-19

Laid-off workers say they waited hours on the phone to apply for help. State websites and phone systems including New York and Oregon, have been overwhelmed by a crush of applicants and have frozen up.

“The most terrifying part about this is this is likely just the beginning of the layoffs,” said Martha Gimbel, a labor economist at Schmidt Futures.

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The Trump administration is pushing through a $2tn stimulus package in an effort to help struggling American workers, businesses and hospitals during this unprecedented economic contraction. The bill includes $1,200 checks for most Americans and additional money for laid-off workers.

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. Restaurants, hotels, movie theaters, gyms, and airlines were hard hit. Auto sales are plummeting, and carmakers have closed factories. Most such employers face loan payments and other fixed costs, so they’re cutting jobs to save money.

As recently as February, the unemployment rate was at a 50-year low of 3.5%. And the economy was growing steadily if modestly. Yet by the April-June quarter of the year, some economists think the economy will shrink at its steepest annual pace ever — a contraction that could reach 30%.

“This morning’s jobless claims confirm that the United States is in the thralls of a catastrophic unemployment crisis, the likes of which we haven’t seen since the Great Depression,” said Andrew Stettner, a senior fellow at the Century Foundation thinktank. “This represents the single worst one-day piece of labor market news in America’s history.”

In California, claims for unemployment benefits more than tripled last week to 187,000. In New York, which now accounts for roughly 5% of global Covid-19 cases, they rose by a factor of five to 80,334. Nationwide, about 2.25% of the entire workforce applied for jobless aid last week. In Nevada, the figure was 6.8%, in Rhode Island 7.5%.

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A lot of workers aren’t currently eligible for unemployment benefits, meaning the true number of layoffs so far due to the coronavirus is likely far higher than 3.3 million. Self-employed workers, gig workers, undocumented workers, students, freelancers and people who worked fewer than six months last year are typically not eligible to apply for unemployment insurance even though in many cases they’re no longer able to earn money.


According to Johns Hopkins University, there are now 55,233 confirmed cases of Covid-19 in the US and 802 reported deaths, up from 302 last weekend. Despite the rising casualties, president Donald Trump said this week that he would like the country “opened up and just raring to go by Easter”.

Trump is concerned the quarantine measures could prove more harmful than the virus, an opinion that is disputed by economists and health experts. On Wednesday he tweeted: “The real people want to get back to work ASAP. We will be stronger than ever before!”

Despite the ominous news about laid-off workers, the stock market rose Thursday with the Dow Jones industrial average gaining 400 points or about 2 percent. Wall Street investors cheered the Senate’s massive government aid package. Investors are hopeful the federal cash for workers and companies will prevent the downturn from spiraling into a lengthy depression like the nation experienced in the 1930s.

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