The number of Americans newly applying for unemployment benefits through state programs increased sharply last week. According to the U.S. Department of Labor, initial jobless claims climbed to 281,000 in the week ended March 14, the highest level since Hurricane Harvey struck the U.S. in the fall of 2017. While the 33 percent increase in initial jobless claims marks one of the largest weekly spikes ever, larger than anything seen during the financial crisis, things are expected to get much worse next week, when the true extent of mass layoffs due to the coronavirus pandemic will become apparent.
State-figures obtained by the New York Times hint at an unprecedented number of initial jobless claims this week. According to the Times, more than 600,000 claims have been filed in just 15 states this week, meaning that the nationwide total could be way above the million mark. David Choi, an economist from Goldman Sachs, says initial claims for the week ending March 21 could even jump to 2.25 million, a number that would quite literally be off the charts.
The sudden increase in jobless claims illustrates the nature of the current crisis. As opposed to other recessions, where economic activity slowly declines, the COVID-19 pandemic has brought the economy to a screeching halt. Numerous economists are now expecting March 2020 to mark the official beginning of a recession, which would bring the longest expansion in U.S. history to a very abrupt end.