For a fourth straight week, millions of Americans filed initial unemployment insurance claims as the impact from the coronavirus outbreak continues to rock the labor market. The Department of Labor reported this morning that initial claims for unemployment insurance (UI) fell to 5.2 million last week (the week ending April 11, 2020) on a seasonally-adjusted basis. That’s a drop from 6.62 million the week prior, revised up from 6.61 million.
In the span of a month, 22 million Americans have filed UI claims. That’s equivalent to the entire population of Florida. By comparison, since the end of the Great Recession, the labor market added 21.5 million jobs. In four weeks, we’ve erased all the job gains from the decade-long recovery following the Great Recession.
Nearly 13 percent of Americans employed in February have now filed for unemployment, but impacts vary from state-to-state ranging from 5.1 percent in South Dakota to 23.4 percent in Michigan. The surge in initial claims indicates that the unemployment rate now likely exceeds 10 percent, which would surpass the peak from the Great Recession. But we won’t know definitively until the Bureau of Labor Statistics’s April jobs report, released on May 8. Separately, Glassdoor research found the percentage of company reviews mentioning layoffs has risen 73 percent in the past five weeks. Some of the largest increases in layoff mentions were in travel & tourism, real estate and even health care.
The torrent of UI claims is the natural consequence of the ongoing shutdown of non-essential businesses, but the 21-million-job question looming over the labor market is whether these layoffs will be temporary or permanent. Initial claims may temporarily stabilize as those impacted by the initial closure of non-essential businesses finish filing for unemployment. However, we could continue to see elevated levels of UI claims in the near future as policy changes expand UI eligibility to assist more workers in need.
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