By Sarah Chaney and David Harrison
The number of Americans seeking unemployment benefits continued
to surge at unprecedented levels, bringing the total number of
applications to nearly 17 million since the coronavirus pandemic
shut down swaths of the U.S. economy.
The Labor Department reported on Thursday that another 6.6
million people submitted new applications for unemployment
insurance in the week ended April 4. That is on top of a revised
6.9 million in the prior week, a record, and 3.3 million the week
before.
States overwhelmed by the volume are still processing backlogs,
suggesting the number of initial claims for benefits could keep
getting bigger.
"You should still expect to see staggeringly large numbers of
individuals file for first-time claims," Joseph Brusuelas, chief
economist for RSM US LLP, said.
The U.S. continued to reel from the highest infection totals in
the world, with containment measures continuing to disrupt business
and daily routines.
Those measures, which include stay-at-home orders across the
country and limits on what businesses can operate, have thrown
millions of people out of work. "People have been asked to put
their lives and livelihoods on hold, at significant economic and
personal cost. We are moving with alarming speed from 50-year lows
in unemployment to what will likely be very high, although
temporary, levels," Federal Reserve Chairman Jerome Powell said in
an online discussion with the Brookings Institution.
The economic disruption is fueling debate within the Trump
administration and across the country over when to ease
restrictions. Treasury Secretary Steven Mnuchin said on CNBC
Thursday that he thought the U.S. economy could be ready to reopen
by the end of May, adding it will be "as soon as the president
feels comfortable with the medical issues."
Meanwhile, lawmakers in Congress argued over the next package of
economic relief, with Senate Republicans and Democrats rejecting
each other's plans to provide additional help for small businesses,
hospitals and others. The Fed separately continued expanding its
rescue efforts with new programs to provide $2.3 trillion in loans
aimed at helping states, cities and midsize businesses.
The labor market and economy has continued to decline as the
crisis continues. Another key measurement of joblessness showed a
record 7.5 million Americans were already receiving unemployment
benefits at the end of March. Such so-called continuing claims --
as opposed to new claims -- grew by 4.4 million in the week ended
March 28, eclipsing the prior record of 6.6 million set in 2009 at
the end of the financial crisis. The number of continuing claims
lags behind the initial-claims data and is expected to continue to
grow.
Jobless claims are applications by laid-off workers for
unemployment insurance payments.
The federal rescue package signed into law in March increases
the pool of workers who can tap benefits by making independent
contractors and self-employed individuals eligible, at least in
some cases.
Subrina Norton, 50 years old, is one American receiving jobless
benefits. She applied for unemployment insurance immediately after
getting laid off from her Oklahoma City waitressing job in March.
Her online application kept getting rejected, prompting her to try
calling.
She was able to access her unemployment benefits after she
contacted the office of one of her U.S. senators, Republican James
Inhofe. The senator's office put her in touch with a state official
who was able to help her fill out the application forms.
"It was just a blessing because I was really getting stressed
out," Ms. Norton said.
Her checks, for $150, started arriving less than two weeks after
she was laid off from her $7.25 an hour job. She is still waiting
for the additional $600 payments that were included as part of the
federal rescue package.
Many laid-off Americans have been unsuccessful in applying for
unemployment insurance as state labor department websites and phone
lines are inundated with inquiries.
"We clearly are still processing individuals who are having a
hard time getting claims through at the state level in addition to
the large numbers of layoffs that corporate America is now doing,"
Mr. Brusuelas, the economist, said.
Meanwhile, auto makers and major retail chains such as Macy's
Inc. have announced furloughs of tens of thousands of workers,
further swelling the ranks of the unemployed.
Mr. Brusuelas said that will likely push the unemployment rate
up to around 20% this year, a figure reminiscent of the Great
Depression.
Last week, jobless claims in California, Georgia and Michigan
were the highest in the nation.
States are adapting to address an unprecedented rise in
applications for unemployment benefits. Many have reallocated or
added staff to handle calls and review claims. Despite these
changes, some Americans are still struggling to file
applications.
Corinne Chin, a 23-year-old resident of Brooklyn, N.Y., hasn't
been able to file for unemployment benefits since she was
furloughed from her creative-marketing agency in mid-March because
of the coronavirus.
She said she sometimes calls New York's labor department
hundreds of times a day.
"I'm stuck right now, and I haven't been able to get through to
any representatives," she said.
Ms. Chin has savings but is worried about her financial
situation in a couple of months if she still doesn't have any
income. Most of the companies in her industry have implemented
hiring freezes. She said she is hesitant to seek a job where work
is available, such as at a grocery store, because of the
possibility she could be exposed to the coronavirus.
Layoffs are hitting a widening array of industries, state-level
data suggest.
In Oregon, slightly more than 30% of the state's jobless claims
in the week ended March 21 were from laid-off workers in the
restaurant industry. In the week after, the share of claims from
restaurant employees remained roughly the same, but the portion of
claims coming from health-care and retail workers rose.
"There's still a lot of these sectors for this virus to go
through," said Jacob Robbins, assistant professor of economics at
the University of Illinois in Chicago. "This is what's really
concerning me right now."
The steep rise in joblessness is keeping job-training centers
like Goodwill in Fort Worth, Texas, busy.
"People are calling in, and they're like, 'I need a job. I need
it right now. I've got to feed my kids,'" said Romney Guy, vice
president of workforce development at Goodwill in Fort Worth.
The Goodwill location is now offering virtual job training to
help people develop resumes, as well as interviewing and computer
skills. Ms. Guy said the job-training center is seeing an increase
in upper-middle-income individuals seeking assistance.
Write to Sarah Chaney at sarah.chaney@wsj.com and David Harrison
at david.harrison@wsj.com
(END) Dow Jones Newswires
April 09, 2020 18:16 ET (22:16 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.