U.S. jobless claims rise 1,064 per cent in one week
While most of the layoffs behind the rise in claims should be temporary, they point to a severe shock to the economy.
By ATB Economics 26 March 2020 1 min read
We knew it was coming, but the rise in the number of weekly unemployment insurance* applications in the United States is staggering.
According to the U.S. Department of Labor, “In the week ending March 21, the advance figure for seasonally adjusted initial claims was 3,283,000, an increase of 3,001,000 from the previous week's revised level.”
The rise in claims is due to layoffs in response to the COVID-19 virus. It represents about two per cent of the labour force and is the largest ever recorded. The old record goes back to October 1982 when 695,000 claims were submitted.
“Nearly every state providing comments cited the COVID-19 virus impacts. States continued to cite services industries broadly, particularly accommodation and food services. Additional industries heavily cited for the increases included the health care and social assistance, arts, entertainment and recreation, transportation and warehousing, and manufacturing industries.”
On March 20, the Prime Minister mentioned the submission of 500,000 Employment Insurance applications for that week (about 2.6 per cent of the labour force), but we don’t have firm numbers on this yet. Service Canada confirmed the estimate and noted only 27,000 applications were received during the same week last year.
While most of the layoffs behind the rise in claims should be temporary, with rehiring taking place after the pandemic recedes, they point to a severe shock to the economy, to the individuals who have lost their jobs and to the businesses that have had to cut staff or shut their doors.
*Unemployment insurance in the U.S. is a joint state-federal program that provides cash benefits to eligible workers. Each state administers a separate unemployment insurance program, but all states follow the same guidelines established by federal law.
A note on COVID-19: The COVID-19 pandemic is having a major impact on the economy here in Alberta and around the world. The Owl will report on these impacts when good information is available while continuing to track regularly scheduled releases of economic data and long-term trends.
For additional information on COVID-19 and advice for the public, please visit World Health Organization or Alberta Health Services. Please go to atb.com for COVID-19-related updates from ATB Financial.