By Jeffry Bartash, MarketWatch
The numbers: The latest round of coronavirus-induced layoffs and furloughs soared by another 6.6 million in the first week of April, bringing total job losses in less than a month to 16.8 million.
Initial jobless claims, a rough proxy for job losses, have now posted increases of 6.6 million, 6.8 million and 3.3 million in the last three weekly readings since the middle of March.
“To put these mind-boggling numbers in perspective, before the March 21 surge, the highest single weekly reading ever recorded was 695,000 in 1982,” said chief economist Joshua Shapiro of MFR Inc.
Nor is the damage about to let up. New jobless claims are expected to continue to climb with so much of the economy shut down and the full resumption of normal activity months away.
“The harsh reality is that the level of initial unemployment insurance claims is unlikely to recede in the coming weeks,” economists Dante DeAntonio and Matt Colyar of Moody’s Analytic said.
What happened: Initial jobless claims leaped a seasonally adjusted 6.6 million in the week of March 29 to April 4, topping the 6 million MarketWatch forecast.
What’s more, new claims in the last week of March were revised up by 219,000 to a record 6.87 million, the Labor Department said Thursday.
In early April, California, Georgia, Michigan and New York recorded the highest number of claims. Applications especially soared in Georgia, where the coronavirus outbreak intensified and the governor ordered more of the economy closed.
California, the nation’s largest state, has reported the most new claims of all in the past three weeks: about 2.5 million.
The number of actual layoffs across the country, however, could be even higher.
Many states have struggled to process the record deluge of new jobless claims or have temporarily rejected the applications of some workers who previously would not have qualified for benefits under the old rules. An emergency federal relief program for the first time has made self-employed workers such as Uber /zigman2/quotes/211348248/composite UBER -0.16% drivers and independent contractors eligible for jobless benefits.
The coronavirus has turned life upside down in the blink of an eye. Just a month ago, new claims were in the low 200,000s and sat near a half-century low.
Already, the ranks of the unemployed appear to have exceeded the prior record of 15.3 million during the 2007-2009 Great Recession.
What’s more, the number of Americans collecting benefits has quickly topped the prior all-time high of 6.6 million. Some 7.5 million people were receiving benefits at the end of March, according to delayed government data on continuing claims. They are reported with a one-week lag.
The big picture: The unprecedented surge in jobless claims has already pushed unemployment above 10%, economists say, more than double the officially reported 4.4% rate in March.
The current pace of job losses suggest the unemployment rate will soon move past 15% and perhaps even exceed 20%, coming close to levels last seen in the 1930s.
A deep recession is all but ensured. How long it lasts will depend on when the viral outbreak slows down, the economy reopens and life starts to return to normal. The prospects aren’t looking good.
What they are saying? “The lockdowns and social-physical distancing are having a huge hit on the U.S. economy and labor market,” said senior economist Jennifer Lee of BMO Capital Markets.
Market reaction: The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.13% and S&P 500 /zigman2/quotes/210599714/realtime SPX +0.24% were rose in Thursday trades after the Federal Reserve unveiled a $2.3 trillion loan program to help businesses survive the pandemic.