About 4.4 million Americans applied for unemployment benefits last week, raising the total number of workers who have lost their jobs since the coronavirus outbreak to more than 26 million. The fallout has left roughly 1 in 6 workers without a job, a number that dwarfs the Great Recession's impact on the U.S. labor market.
The number of people filing for unemployment for the week of April 18 reflects a decline of 810,000 from the previous week, the Department of Labor said Thursday. Unemployment claims, reported weekly, are a barometer of the job market because they indicate how many workers have lost their jobs.
Many economists say the nation's unemployment rate is around 15% and could eventually approach 20%. The jobless rate peaked at about 25% during the Great Depression.
"This is another terrible week for layoffs," said Aberdeen Standard Investments senior global economist James McCann in an email. "One of the concerns is that the government support doesn't seem to be stemming the tide here."
The Paycheck Protection Program, designed to help small businesses maintain their payrolls, has faced criticism for failing to help many of the companies it was designed to aid. The programwith relatively few novel coronavirus cases as well as to larger companies, including national restaurant chains.
Lawmakers are now working onthat would replenish funds for the program, which was quickly depleted. But it's unclear whether that funding will reach small businesses quickly enough to save jobs, noted Jeff Schulze, investment strategist at ClearBridge Investments.
"Small businesses have faced challenges with the Paycheck Protection Program, which ran out of funding last week," he noted in an email. "Most small businesses have only a month of cash on hand and shutdowns have now extended past that point in much of the country."
"In the millions"
Jobless claims will likely gradually decline in the coming weeks, although they "are still set to remain on levels in the millions," Morgan Stanley economist Jan Kozak said in a report ahead of the latest labor data.
A jobless rate of 15% in April would reflect a spike of more than 10 percentage points within a month, given that the March jobless rate stood at 4.4%. It would also exceed the Great Recession's highest unemployment rate, which reached 10% in October 2009. The Bureau of Labor Statistics will report the monthly unemployment rate in early May.
"We cannot be sure of the magnitude of job losses in April, but are certain they will be shockingly high," Rubeela Farooqi of High Frequency Economics said in a report. "Labor market conditions have deteriorated sharply in response to the economy largely being closed for virus containment."