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Millions of workers already filing for unemployment benefits, Wall Street says

Unemployment skyrockets during coronavirus

Workers are losing their jobs at an unprecedented pace as the coronavirus shutters businesses and brings the economy to a sudden stop. That could lead as many as 2 million people to file for unemployment benefits this week alone, according to Goldman Sachs — that would roughly triple the previous high for weekly jobless claims set in 1982, when the country was in the grips of deep recession.

"State-level anecdotes point to an unprecedented surge in layoffs this week," analysts with the investment bank said in a note to investors. "These anecdotes suggest that the next jobless claims report covering the week of March 15-21 will show that initial claims rose to roughly 2¼ million, the largest increase in initial jobless claims and the highest level on record."

Goldman pointed to news reports of a surge in unemployment applications in a number of states this week. In California, where about 2,000 people apply for unemployment every day, the state saw 190,000 applications in a three-day period, according to the Sacramento Bee. In Illinois, more than 40,000 people applied for unemployment on Tuesday and Wednesday, a tenfold increase from the year before. In Connecticut, claims this week increased by a factor of 20 over their typical amount.

Other economists also expect a deluge of layoffs. Justin Wolfers, a professor of economics and public policy at the University of Michigan, told CBS News he expects between a million and 1.5 million claims next week.

"We expect the next two to three weeks to be terrifying," Wolfers said. "All of those job losses that would normally occur over several months are going to occur over several weeks."

Oxford Economics predicts 1.2 million initial unemployment claims next week.

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Whatever the numbers, they're almost certain to undershoot the extent of people losing work. Uber and Lyft drivers, actors, tour guides and fitness instructors are among the many workers who've lost business during the crisis but, because the law considers them to be independent contractors, won't be able to collect unemployment benefits.

By this summer, as many as 4 million hospitality workers could lose their jobs, according to an estimate from outplacement firm Challenger Gray & Christmas. The Economic Policy Institute estimates that as many as 3 million workers could be laid off. The Travel Industry Association estimates 4.6 million workers in that field alone will lose their jobs this year.

It can take anywhere from two to four weeks for a laid-off worker to show up in the official unemployment statistics, said Joe Bruesuelas, chief economist at the global accountancy RSM.

"This is going to be a rolling exercise in estimating the damage to the labor market due to the crisis."

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