The number of Americans applying for unemployment benefits soared to a record 6.65 million last week, a level unimaginable just a month ago.
“I never thought I’d see such a print in my lifetime as economist,” said Thomas Costerg at Pictet Wealth Management, who had the highest forecast in the Bloomberg survey, at 6.5 million. Claims are likely to stay elevated as more states announce stay-at-home orders, and it would be “not unthinkable” to see a 20% unemployment rate, more than double the high that followed the last recession, he said.
The 6.65 million jobless claims filed in the week ended March 28 were more than double the previous record of 3.31 million in the prior week, according to Labor Department figures released Thursday.
The data come a day before the March jobs report, which is expected to show the first monthly decline in payrolls since 2010. Nonetheless, those figures will show only the start of the labor-market damage, as the government’s survey period covered early March, prior to the biggest rounds of layoffs and closures.
“When you look at the number last week and this week and take those together that’s roughly a 6 percentage-point rise in the April unemployment already, and we have a few more weeks to go for the April employment report,” Michael Gapen, chief U.S. economist at Barclays Plc, said on Bloomberg Radio. “It is likely the unemployment rate will be rising above where we saw it in ’08 and ’09 and may come as soon as that April employment report, if not certainly into the May report.”
One caveat to the data: the department’s seasonal adjustments are likely overstating the level of claims, according to Jacob Oubina of RBC Capital Markets. On an unadjusted basis, there were 5.82 million applications last week following 2.92 million the prior week.
State Breakdown
- California reported the most initial claims last week at an estimated 879,000 on an unadjusted basis, following 186,000 the prior week; it was also the biggest increase among all states and territories
- Pennsylvania had an estimated total of about 406,000, following 377,000
- New York had 366,000
- Michigan reported 311,000
- Texas had about 276,000
- Ohio reported 272,000
- Florida had 227,000
- New Jersey had 206,000