The COVID-19 pandemic’s rapid spread continues to hammer the U.S. economy, and Thursday’s initial jobless claims data showed yet another brutal week for the U.S. labor market.
Following two consecutive weeks of jobless claims in the millions, another 6.606 million Americans filed for unemployment benefits for the week ending April 4, as the coronavirus continues to hammer away at the U.S. economy. Economists were predicting 5.5 million jobless claims for the week. The prior week’s record-breaking figure was revised higher to 6.867 million from 6.648 million.
“The labor market is setting records, but for all the wrong reasons. Another 6.6 million unemployment claims were filed in the past week, bringing the tally to an unprecedented 16.5 million in the past three weeks alone,” Greg McBride, Bankrate’s chief financial analyst, said in an email. “Continuing unemployment claims also hit a new record of 7.45 million, and soon enough this will be the number we watch every week instead. Once the economy restarts, the staggering unemployment will linger for months or even years.”
JPMorgan expected 7 million jobless claims for the week ending April 4, which was one of the highest estimates on Wall Street. Estimates varied widely as with previous weeks; however, almost every single economist believed claims likely were in the millions last week. On the low end of the range, Deutsche Bank and Barclays estimated roughly 4.5 million claims.
For the week ended April 4, California saw the highest number of initial claims at an estimated 925,000 on an unadjusted basis, up from 879,000 the prior week. Georgia had an estimated total of 388,000, Michigan had 385,000, and New York reported 345,000.
Certain states got hit harder than others last week, and with massive backlogs piling up, there’s more pain ahead, according to UBS economist Seth Carpenter.
“In last week’s data, about a third of the rise reflected states where processing had not kept up with initial claims during the first weeks of the crisis (CA and NY especially). We think claims in those states still have further to rise,” Carpenter explained in a note published on April 3.
States that joined “shelter-on-place” guidelines later were expected to see a large uptick in claims filed. “The states that delayed their restrictions on activity—FL, GA, VA, NC, TX—might seem to pose an upside risk to our claims estimate,” Carpenter said. “However, new claims in NC, at 66 times their normal level over the past year, already have risen more than the national average (32x), as have those in VA (55x) and FL (52x). We do not expect further increases. However, we do estimate spikes in TX and GA.”
In addition, Google searches for “unemployment benefits” continued to soar over the past month. After peaking on March 26, interest hit new highs April 2 before falling slightly from those levels. Nevertheless, Google searches for the phrase remain elevated. The upward trend began March 11 right before President Donald Trump declared the COVID-19 outbreak a national emergency on March 13.
Coronavirus cases are still on the rise. As of Thursday morning, there were more than 1.496 million confirmed cases and 89,435 deaths globally, according to Johns Hopkins University data. The U.S. remains the most infected country in the world with over 432,000 confirmed cases and 14,808 deaths.
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Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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