In just five weeks, 26.5 million people have filed for unemployment as a result of the economic fallout due to coronavirus quarantine measures. According to the Labor Department, 4.427 million Americans applied for state unemployment benefits last week alone.
The previous one-week high for jobless claims was 695,800 in 1982.
Five weeks to wipe out all the job gains over the last 11 years
Following the 2008 Great Recession, the United States had experienced one of its longest streaks of economic growth, managing to add 22.442 million jobs since November 2009. All of these jobs and millions more were lost almost overnight as a result of the coronavirus pandemic.
The official outlook on the U.S. unemployment rate for the month of April won’t be released until May 8, and may be bleaker than even some of the most pessimistic investors imagined.
In March, the unemployment rate surged to 4.4%. April might mark at least 16% in unemployment across the nation — that’s one in six American adults who are jobless. Prior to the coronavirus pandemic, the unemployment rate hovered at around 3.5% — the lowest it’s been in 50 years.
Part-time jobs held for economic reasons jumped from 7% to 8.7%, the highest since March 2017.
But at least those who still have a job earn more. Wages have risen by 3.1% year over year, which is slightly better than forecasted at the start of 2020.
Bars, restaurants, and hotels among the hardest hit
About two-thirds of all lost jobs since the pandemic are in the hospitality industry. Many of these jobs could be gone for good even after the lockdown lifts since social distancing orders will likely still apply going forward. This means that many bars and restaurants, which already operated on very thin margins, will be forced out of business.
There is little demand for socially-centered physical business in a world that puts a premium on distancing.
Health care and social assistance lost 61,000 jobs, professional and business services declined by 52,000, and retail fell 46,000. Construction dropped by 29,000 jobs while other services industries combined to lose 24,000.
One of the few sectors and industries that added jobs rather lose them was the government, which saw an increase of 18,000 jobs.
“Today’s numbers are shockingly bad and an understatement of the damage already done to the U.S. economy,” said Nick Bunker, economic research director at job search site Indeed. “If this is an indication of what was happening before the full force of the crisis hit, then it will be hard to come up with the words to describe the numbers in future months.”
In order to offset some of the massive losses in the labor market, the federal government signed a $2 trillion stimulus package at the end of March. More than 40 states have offered an additional $600 a week in unemployment benefits, besides regular state payments.