U.S. Weekly Jobless Claims Spike By More Than 3 Million
March 26 2020 - 5:33AM
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Reflecting the shutdown of large swaths of the U.S. economy due
to the coronavirus pandemic, the Labor Department released a report
on Thursday showing a record spike in first-time claims for
unemployment benefits in the week ended March 21st.
The Labor Department said initial jobless claims skyrocketed to
3,283,000, an increase of 3,001,000 from the previous week's
revised level of 282,000.
Economists had expected jobless claims to spike to about 1.5
million from the 281,000 originally reported for the previous
week.
With the record-breaking increase, the number of seasonally
adjusted initial claims reached the highest level in the history of
the seasonally adjusted series. The previous high was 695,000 in
October of 1982.
While the increase in unemployment claims is staggering,
economists noted the data may still underestimate the number of new
claims due to constraints on the capacity of offices to process
claims.
The report said there were 186,800 new claims in California and
80,300 new claims in New York, which economists said seem low based
on anecdotal evidence.
"We would expect numbers from these states and others to climb
in coming weeks, particularly with the number of lockdowns
increasing across the U.S.," said ING Chief International Economist
James Knightley.
The four-week moving average of claims is seen as less volatile
but still soared to 998,250, an increase of 765,750 from the
previous week's revised average of 232,500.
The report also said continuing claims, a reading on the number
of people receiving ongoing unemployment assistance, jumped by
101,000 to 1.803 million in the week ended March 14th.
The increase drove continuing claims to their highest level
since reaching 1.824 million in the week ended April 14, 2018.
The four-week moving average of continuing claims climbed to
1,731,000, an increase of 27,500 from the previous week's revised
average of 1,703,500.
Next Friday, the Labor Department is scheduled to release its
more closely watched report on the employment situation in the
month of March.
"Based solely on the historical relationship between claims and
the unemployment rate, 3,283,000 equates to an unemployment rate of
somewhere between 30% and 40%," said Paul Ashworth, Chief U.S.
Economist at Capital Economics.
He added, "We are not suggesting the latter will rise to those
levels, but we would be amazed if it didn't exceed 10% by May, if
not April."
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