Another tidal wave of layoffs rocked the United States workforce last week as initial claims for unemployment insurance rose to 6.6 million, setting a stunning new record for the second week in a row and doubling last week’s already eye-watering record. Additionally, initial claims for the week ending March 21 were revised up slightly from 3.28 million to 3.31 million. In the last 2 weeks, a combined 9.95 million Americans have made initial unemployment insurance claims. By comparison, the economy has added 9,447,000 jobs since 2016, meaning four years of job gains have evaporated in the span of two weeks. Today’s report is a one-two punch for an economy reeling from the coronavirus outbreak.
In a reversal, the often overlooked UI claims report provides more insight into the current state of the labor market than tomorrow’s March jobs report from the Bureau of Labor Statistics will. The claims report provides a real-time view of recent layoffs while the jobs report won’t reflect this surge in unemployment until next month. But a simple estimate shows that 9.95 million additional unemployed workers (assuming none leave the labor force) would raise the unemployment rate from 3.5 percent to 9.6 percent, the highest rate since 2010, and decrease the employment-population ratio from 61.1 percent to 57.3 percent, the lowest rate since 1983.
As more states and localities shut down non-essential businesses to preserve public health in response to the coronavirus outbreak, initial claims are likely to continue to produce eye-popping reports. While this week’s data shows that we’re still in the thick of the crisis, the question now is when initial claims will peak and return to more normal levels.
To speak with Daniel Zhao about today’s report, Friday’s jobs report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @danielbzhao on Twitter and subscribe to Glassdoor Economic Research.