Nearly 3.3 million Americans applied for unemployment benefits last week — more than quadruple the previous record set in 1982 — amid a widespread financial shutdown caused by the coronavirus.
The surge in weekly software was a stunning manifestation of the harm the viral epidemic is doing to the market. Filings for unemployment aid generally reflect the pace of layoffs.
The pace of globalization is guaranteed to accelerate as the U.S. economy sinks into a recession. Revenue has dropped at restaurants, hotels, movie theaters, gyms, and airlines. Automobile sales are plummeting, and vehicle manufacturers have close factories. Most such companies face loan payments and other fixed costs, so they are cutting jobs to save cash.
As job losses mount, some economists say the country’s unemployment rate could approach 13percent by May. By comparison, the highest jobless rate throughout the Great Recession, which finished in 2009, was 10%.
The economic deterioration has been swift. As recently as February, the unemployment rate was in a 50-year low of 3.5%. And the market was growing steadily if modestly. Yet from the April-June quarter of this year, some economists believe the economy will shrink in its steepest annual rate ever — a contraction which may reach 30%.
Lots of folks who have lost jobs in recent times have been not able to apply for unemployment help because state sites and phone systems are overwhelmed by a crush of applicants and have suspended. This logjam indicates that Thursday’s report on filings for unemployment benefits actually understates the size of job cuts last week.
With layoffs soaring, a considerable growth of unemployment benefits to the millions who will lose jobs because of the coronavirus outbreak was contained within an economic relief bill nearing final approval in Congress. 1 provision in the bill would give an additional $600 per week in addition to the unemployment aid which states provide. Another would extend 13 additional weeks of benefits beyond the six months of jobless aid that many states offer.
Independent legislation passed last week provides up to $1 billion to states to improve their capacity to process claims. But that money will require time to be disbursed.
Jessy Morancy of Hollywood, Florida, was set off Friday from her job as a wheelchair attendant and customer service representative at Fort Lauderdale Airport. Morancy, 29, known as the state unemployment office Monday to attempt to apply for unemployment benefits but struck a recorded message telling her to call back later.
She was also worried that a complete unemployment benefit of $275 per week could be less than half of what she earned at her job and inadequate to provide for her kids, ages 10 and seven.
“I’m still in a state of shock,” Morancy said.
She said she’s heard that airline workers might continue to get salaries if Congress provides financial help to the airlines. Yet even so, it is not clear that workers like her who work for builders — Eulen America, in her case — will be eligible.
“If these companies are going to get a bailout, why not include us?” Morancy said.
For those able to submit a claim, the benefits will take some time to kick in. It typically takes two to three weeks before applicants get any cash. State agencies need to first contact their former employers to verify their earnings and work history. Only then can the worker’s weekly unemployment benefits be calculated.
Worsening the issue, most state agencies that manage unemployment claims are working at historically low funding levels and staffing which are meant to deal with a trickle of claims. Only weeks ago, the job market was in the strongest form it was in decades.
Kim Boldrini-Sen, 41, has also struggled to file her claim. She’s attempted in two countries: In Connecticut, where she works as an acupuncturist at a private clinic, and in New York, where she lives and has her very own acupuncture enterprise.
In Connecticut, she believed her application was submitted. But when she returned to re-file as applicants have to perform each week, she discovered there was no record of her first filing. After taking an hour to re-file, she received a pop up note that she was ineligible to do this online.
In New York, the nation’s site repeatedly crashed when she was halfway through filling out her petition. When she finally managed to press on submit, she obtained a pop-up stating she needed to file over the telephone. That has not worked well, either.
“I’ve called at all hours of the day, she said. “That has been my life for a week, and I still can not get through to anybody.”
On Monday, the New York State Department of Labor tweeted, “If you have been unable to get through our phone and/or online system this week, please keep trying.”
“We are working as hard as we can to ensure that all benefits are paid and appreciate your patience,” the bureau said on Twitter.
Ellen Zentner, an economist at Morgan Stanley, said in a note to clients that 17 million jobs could be lost through May — double the full 8.7 million jobs which were lost in the Great Recession. She expects the unemployment rate to average 12.8percent in the April-June quarter, which are the highest level since the 1930s.
However, Zentner also expects the market to begin recovering by the second half of this year. It will take some time for things to come back to something near normal, she endeavors: The unemployment rate could still top 5% at the end of next year.