Jobless Claims Surge to 22M in 4 Weeks

Some 5.2 million Americans filed initial unemployment claims last week.

State unemployment offices have been inundated with new claims in recent weeks as the coronavirus shuts down much of the domestic economy

More than 5.2 million Americans filed initial unemployment claims last week – a slight downtick from the prior week's 6.6 million but a number that is still several multiples higher than what would be considered historically normal levels.

Over the past four weeks, roughly 22 million Americans have filed initial unemployment claims, according to data published on Thursday by the Department of Labor. That's about 14% of all Americans who were employed in February, the month before coronavirus lockdowns ravaged employment and business across the country. That's also roughly equivalent to the entire population of Florida filing for unemployment.

"While this week's data is down slightly from last week's six million figure, it is a stark reminder that the economic damage from COVID-19 just keeps coming," Andrew Stettner, senior fellow at the Century Foundation, said in a statement on Thursday. "The torrent of claims is clear evidence that economic mitigation efforts like Paycheck Protection for small businesses, while important, have not yet stopped the flow of people from payrolls to unemployment."

Between late 2010 and early 2020 – a more than nine-year run of job growth as the U.S. enjoyed its longest economic recovery on record – domestic employers created more than 22 million new jobs. Just about all of those 22 million additions have been wiped out in less than a month.

The Labor Department's Thursday report pointed directly to the coronavirus outbreak as being responsible for the country's historic unemployment spike, saying that the disease "continues to impact the number of initial claims and insured unemployment." And even though last week's 5.2 million claims is a slight drop from the two weeks that preceded it, it is still the third-highest weekly total on record.

Prior to the coronavirus outbreak, the weekly claims record sat at 695,000, which was reached in 1982.

"The fact that 22 million individuals have filed for unemployment benefits in just four weeks shows that the labor market has entered a traumatic period," a team of economists at Oxford Economics said in a statement on Thursday. "While some jobs will be recouped as activity rebounds, we don't expect the economy to reach the February 2020 level of employment until early 2022."

Experts widely predicted initial claims would ease this week after soaring north of 6 million in the two weeks prior. Many of the businesses that were going to lay off workers on the front end of the outbreak have already done so. The fear now is businesses that have not already shed payrolls are running out of funds and may contribute to an additional unemployment spike over the course of the next several weeks. In much of the country, lockdowns and social distancing measures are not expected to be lifted in the very near future, despite White House focus on relaxing restrictions in May.

And even once measures are lifted, cautious consumers who may want to save their money or simply continue self-isolating to guard against catching the virus will prevent the V-shaped rebound that some optimistic analysts had initially hoped for.

"With no immediate end in sight to efforts aimed at mitigating the virus' spread and impact, it is impossible to see a near-term upturn in employment prospects," Mark Hamrick, senior economic analyst and Washington bureau chief at Bankrate.com, said in a statement on Thursday. "Many individuals who remain gainfully employed will be extremely cautious for the foreseeable future with their personal finances, justifiably so. For those who have the would-be luxury, bolstering emergency savings is key given the current substantial level of employment and income insecurity."