New U.S. Department of Labor figures released Thursday show 3.3 million people filed initial jobless claims for the week ending March 21, a number that obliterated the previous high of 695,000 in October 1982, according to the department’s report.
Filings for unemployment aid generally reflect the pace of layoffs. The pace of layoffs is sure to accelerate as the U.S. economy sinks into a recession.
Economists were forecasting Thursday’s numbers to shatter previous records for the greatest number of new unemployment claims filed in a week.
As job losses mount, some economists say the nation’s unemployment rate could approach 13% by May. By comparison, the highest jobless rate during the Great Recession, which ended in 2009, was 10%.
The Senate unanimously passed a $2 trillion stimulus package late Wednesday that provides emergency relief for American workers and businesses during one of the worst economic crises in U.S. history, which was caused by the coronavirus pandemic.
The bill will next face a vote Friday in the U.S. House of Representatives.
The economic deterioration has been swift. As recently as February, the unemployment rate was at a 50-year low of 3.5%. And the economy was growing steadily if modestly.
Yet by the April-June quarter of the year, some economists think the economy will shrink at its steepest annual pace ever — a contraction that could reach 30%. Many people who have lost jobs in recent days have been unable to file for unemployment aid because state websites and phone systems have been overwhelmed by a crush of applicants and have frozen.
That logjam suggests that Thursday’s report on filings for unemployment benefits actually understates the magnitude of job cuts last week.
With layoffs surging, a significant expansion of unemployment benefits for the millions who will lose jobs as a result of the coronavirus outbreak was included in an economic relief bill nearing final approval in Congress.
One provision in the bill would provide an extra $600 a week on top of the unemployment aid that states provide. Another would extend 13 additional weeks of benefits beyond the six months of jobless aid that most states offer. Separate legislation passed last week provides up to $1 billion to states to enhance their ability to process claims. But that money will take time to be disbursed.
Global stocks and U.S. futures declined Thursday after the U.S. Senate approved a proposed $2.2 trillion virus aid package following a delay about its details and sent the measure to the House of Representatives.
The Associated Press contributed to this report.
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