WASHINGTON — The American job market is imploding like never before in history.
More than 6.6 million people filed unemployment claims for the first time last week, in a mushroom cloud of bad economic news that was even worse than the historically unprecedented 3.3 million new claims from the previous week.
The new jobless numbers, released by the Bureau of Labor on Thursday morning, show the stunning extent of the economic devastation brought by the coronavirus pandemic, which has left tens of millions of workers stuck in their homes and brought everyday life to a standstill across the country.
The figures suggest that the pandemic has cost roughly 10 million Americans their jobs in just two weeks.
Economists who study unemployment had expected the new figures would be a bloodbath — but they didn’t think it would be this bad. Morgan Stanley had expected a number closer to 4.5 million, and Goldman Sachs had estimated roughly 5.5 million.
But the latest staggering statistics left them wondering how long the carnage can go on.
Goldman Sachs predicted this week that the U.S. economy will shrink by 34% compared to the same quarter a year earlier, and that U.S. total unemployment will soar to 15% by the middle of 2020. But the bank also predicted that half of the economic decline should be recovered by the end of this year as the contagion fades.
The new numbers reveal fresh job losses in the industries that were first to suffer from the contagion: restaurants and hotels. But they also showed damage radiating out into other sectors including healthcare, manufacturing, retail, and construction, according to the Department of Labor.
The federal government has scrambled to prop up the economy with $2 trillion in emergency aid spending that cheered the stock market but has so far failed to save jobs. The new measures include:
- A $600 weekly bump in unemployment benefit checks for laid off workers across the country
- $1,200 checks to be sent directly to American adults
- $350 billion in loans to small businesses and gig economy workers
- A $500 billion fund for loans to industries and states.
But many officials in Washington think even that unprecedented level of government spending won’t be enough, and Congress is now discussing a further round of stimulus.
Eugene Scalia, the Secretary of Labor, said earlier this week that funds for the $600 weekly boost to unemployment checks should be delivered to states this week, but he couldn’t say when people who’ve lost their jobs will actually start receiving the money.
The Treasury Department has said that it expects small businesses and sole proprietors to be able to apply for emergency loans to help cover paychecks by this Friday. Those loans will be designed to include funds that won’t ever have to be repaid, so long as they’re used to cover paychecks and other expenses that are necessary for staying in business, like rent.
The blanket economic devastation has prompted a fierce debate over how long the country can stay closed for business. President Trump expressed optimism in late March that he might be able to tell workers to get back to business by Easter, April 12. But scientists and doctors poured scorn on that idea, saying it could prolong the crisis and make more Americans sick, and Trump eventually changed his tune.
At this point, the White House says guidelines recommending Americans shelter from the virus will remain in place through the end of April. But estimates delivered by the White House coronavirus task force on Monday suggest that even if U.S. infections and deaths peak in April, the contagion will still be raging in May.
Cover: In this March 30, 2020, file photo, a worker leaves the the Frank P. Zeidler Municipal Building in Milwaukee. Gov. Tony Evers asked President Donald Trump on Tuesday, March 31, 2020 to issue a major disaster declaration for the state of Wisconsin due to the coronavirus pandemic, as unemployment claims hit a daily high and the state's health secretary warned lawmakers that Medicaid enrollments were going to increase dramatically. (AP Photo/Morry Gash, File)