As businesses continue to remain closed because of the pandemic, workers are steadily laid off.
The steady stream of layoffs resulting from businesses temporarily closing due to the coronavirus pandemic has led to millions of additional unemployment insurance claims.
In April’s first full week, an additional 5.2 million workers submitted their first week’s filing for benefits.
US Department of Labor data showed that the total number of Americans who have filed their first unemployment insurance claims is 22 million in four weeks following March 14. This represents approximately 13.5 percent of the US labor force. That four-week span represents the largest and most significant increase in claims since data started being collected by the Labor Department in 1967.
This is placing substantial strain on the state agencies’ capacity to handle the spike in applicants. Moreover, it is placing some of the states’ trust funds in jeopardy over the coming weeks.
Though there have been other crises in joblessness, they arrived far more gradually. For instance, the Great Recession may have faced 8.6 million unemployed Americans, but that occurred from the peak point in November 2007 through to the end of December 2009.
The new lockdowns caused all the layoffs and unemployment insurance applications to occur at once.
The widespread furloughs and layoffs occurred as some states put their lockdowns into place. This shuttered all but essential businesses in the hopes of slowing the spread of COVID-19.
The official jobless rate in the United states had reached a historic low in February at 3.5 percent but climbed to 4.4 percent in March. By the close of April, the rate is expected to hit double-digits.
“April is bound to be truly shocking,” said Fitch Ratings chief economist Brian Coulton as quoted in a CNN report. Coulton estimates that the joblessness rate will break the 15 percent mark before April is finished, which would be a post-World War II record high.
Service job workers were the first to start filing for unemployment insurance benefits as they were the first to be laid off. Restaurant, hotel and retail workers saw the layoffs before most other industries.