WASHINGTON — The number of Americans applying for unemployment benefits in the two months since the coronavirus took hold in the U.S. has swelled to nearly 39 million, the government reported Thursday, even as states from coast to coast gradually reopen their economies and let people go back to work.
More than 2.4 million people filed for jobless aid last week in the latest wave of layoffs from the outbreak that has triggered nationwide business shutdowns and brought the economy to its knees, the Labor Department said.
That brings the running total to a staggering 38.6 million, a job-market collapse unprecedented in its speed.
The number of weekly applications has slowed for seven straight weeks. Yet the figures remain breathtakingly high — 10 times higher than normal before the crisis struck.
And the continuing rise shows that even though all states have begun reopening over the past three weeks, the job market has yet to snap back, and the outbreak is still doing damage to businesses and destroying livelihoods.
IMPACT ON THE ECONOMY:
“While the steady decline in claims is good news, the labor market is still in terrible shape,” said Gus Faucher, chief economist at PNC Financial.
Federal Reserve Chairman Jerome Powell said over the weekend that the U.S. unemployment rate could peak in May or June at 20% to 25% — a level unseen since the depths of the Great Depression.
As of April, unemployment stood at 14.7%, a figure also unmatched since the 1930s. And the true rate was even higher, because millions of Americans weren’t officially counted as unemployed since they weren’t looking for a new job, presumably because nearly everything was shut down anyway.
Over 5 million people worldwide have been confirmed infected, and about 330,000 deaths have been recorded, including more than 93,000 in the U.S. and around 165,000 in Europe, according to a tally kept by Johns Hopkins University and based on government data. Experts believe the true toll is significantly higher.
European countries have also seen heavy job losses, but robust government safety-net programs in places like German and France are subsidizing the wages of millions of workers and keeping them on the payroll.
Across the U.S., some companies have begun to rehire their laid-off employees as states have eased restrictions on movement and commerce. On Monday, more than 130,000 workers at the three major American automakers, plus Toyota and Honda, returned to their factories for the first time in two months.
Still, major employers continue to cut jobs. Uber said this week that it will lay off 3,000 more employees because demand for rides has plummeted. Digital publishers Vice, Quartz and BuzzFeed, magazine giant Conde Nast and the owner of The Economist magazine announced job cuts last week.
Stephen Stanley, chief economist at Amherst Pierpont, said the latest layoffs may be particularly worrisome because they are happening even as states reopen. That could mean many companies see little hope of a substantial economic recovery anytime soon and still feel a need to cut jobs.
“There’s a high probability that those layoffs could persist for longer than those that were a function of (businesses) just being closed,” Stanley said.
The latest figures do not mean 38.6 million people are out of work. Some have been called back, and others have landed new jobs. But the vast majority are still unemployed.
An additional 1.2 million people applied for unemployment last week under a federal program that makes self-employed, contractor and gig workers eligible for the first time. But those figures aren’t adjusted for seasonal variations, so the government doesn’t include them in the overall number of applications.