US jobless claims report: Record 3.2 million seek unemployment benefits

More On: Coronavirus

A record 3.2 million people applied for unemployment benefits last week as the coronavirus crisis forced layoffs around the US, the feds said Thursday. The seasonally adjusted total reported by the US Labor Department shattered expectations as well as the previous record of 695,000 initial jobless claims in a single week, which was set in …

A record 3.2 million people applied for unemployment benefits last week as the coronavirus crisis forced layoffs around the US, the feds said Thursday.

The seasonally adjusted total reported by the US Labor Department shattered expectations as well as the previous record of 695,000 initial jobless claims in a single week, which was set in 1982.

“Millions of Americans are filing for benefits and that means the economy is not just staring down at the abyss, it has fallen off the cliff and down into the depths of recession,” Chris Rupkey, chief financial economist at MUFG Union Bank, said in a Thursday note.

The staggering number for the week ending March 21 — the first indication of how hard the pandemic has hit the labor market — was more than 3 million higher than the prior week’s revised total of 282,000.

Experts predicted a huge spike in reported jobless claims this week as the economic damage of the virus crisis became clear. But the total turned out to be much larger than the 1 million applications expected by economists in a Reuters survey.

The number likely would have been higher if a surge in applications hadn’t overwhelmed benefits websites in some states, Rupkey said.

“The closest historical comparison would be natural disasters like major hurricanes, which lead to sudden spikes in unemployment claims, but even those comparisons are inadequate,” Glassdoor senior economist Daniel Zhao said. “The coronavirus outbreak is akin to a major hurricane occurring in every state around the country for weeks on end.”

States cited the impact of the coronavirus pandemic in reporting figures to the feds, according to the Labor Department’s weekly report. Services industries continued to take a hit while other sectors such as health care, arts, entertainment and transportation also contributed to the jump, officials said.

The crisis that has led to widespread business closures and lockdown measures in several states could cause the unemployment rate to match or exceed its 10 percent peak during the financial crisis of the late 2000s, experts have said. That would mark a staggering increase from 3.5 percent unemployment in February.

But last week’s newly sacked workers won’t show up in the government’s March jobs report to be released next week, which relies on a survey covering only the first part of the month, according to Zhao. That means the full effect of the coronavirus crisis likely won’t be seen until May, when the April jobs report comes out.

The $2 trillion stimulus package the Senate passed late Wednesday “is what is required to begin providing help to this economy that is dealing with an unprecedented drop in consumer demand and is now being exacerbated by a huge spike in unemployment,” Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance, said in a statement.