The US Department of Labor registered nearly 3.3 million initial unemployment insurance claims last week, according to data newly reported on Thursday morning.
That shatters the previous record, which was about 700,000 in seasonally adjusted terms, or a million in raw terms, way back in 1982. Just a few days ago, a Goldman Sachs analysis predicting 2.25 million initial claims was seen as an alarming forecast. The real figure was much higher — pretty much literally off the charts.
And the news, to be clear, is in many ways even worse than that sounds. This is data released on the morning of March 26, but it covers the period that ended on March 21. Total or partial shutdowns of non-essential business activity have spread considerably since five days ago, so we should expect next week’s report to feature further devastation. And that’s to say nothing of the secondary consequences of people losing jobs and incomes to Covid-19 and thus being forced to curtail spending.
The scale and pace of the economic collapse has already inspired the Federal Reserve to pull a dramatic range of policy levers to try to stem the tide. And the United States Senate has passed a large $2 trillion stimulus package that is expected to sail through the House shortly.
That stimulus contains a broad range of provisions, but in light of the surge of newly unemployed people, the expansions of the unemployment insurance program that Senate Democrats fought for are particularly important: Benefits would increase by $600 per week for the first four months, and eligibility would expand to gig economy workers, freelancers, and furloughed workers who are still getting health insurance from their employers, but are not receiving a paycheck.
But the sheer volume of claims is high — literally off the charts — and there’s little reason to believe Thursday’s report is the end of the economic pain.