That was far greater than economists had expected, and more than 3,000% the pre-pandemic levels. Unemployment claims at this level suggest a severe job market decline hardly any American alive has ever seen in their lifetimes.
That corresponds to roughly 6% of America’s 165 million strong work force, which in turn implies a 9.5% unemployment rate, according to Citi economist Andrew Hollenhorst.
“Further job loss expected in coming weeks is very likely to push unemployment above 10%, even taking account of a potential steep decline in the labor force participation rate, as some displaced workers are neither furloughed nor looking for work,” Hollenhorst wrote in a note.
Whether this week’s massive claims number was the worst of it remains to be seen. Ahead of the coronavirus outbreak, weekly first-time claims had been hovering in the low 200,000s.
This “tectonic shift” in the US labor market “implied a real-time unemployment rate of 10.1% at a minimum,” said Joseph Brusuelas, chief economist at RSM.
As companies continue to close their doors and shed workers to limit the spread of coronavirus throughout the population, more workers will need government aid to make ends meet.
The March report will be more muted because the survey it is based on concludes around the middle of the month — which was before millions of Americans filed for unemployment benefits for the first time.