With social distancing orders, many businesses, particularly those deemed “nonessential” have shuttered as countries try to suppress the spread of the novel coronavirus, COVID-19, resulting in layoffs and furloughs and thus, unemployment.
As a result, since March 14, some 22 million Americans have filed initial jobless claims, CNN reports.
The spike in claims seen in the past four weeks is the biggest and sharpest surge since the United States Department of Labor started tracking such data in 1967 and could pose a threat to some states’ unemployment trust funds as the country still grapples with the uncertainty of the pandemic.
According to CNN, by the time the April data rolls around, the employment rate in the country, which already jumped to 4.4% in March after reaching a historic low of 3.5% in February, is expected to climb into the double digits.
“April is bound to be truly shocking,” Brian Coulton, chief economist at Fitch Ratings who believes the unemployment rate could reach 15% in April, told CNN.
These new applications for unemployment benefits don’t always result in people actually getting benefits, however. Currently, as of the week ending on April 4, about 12 million Americans were getting benefits. However, that figure is also at a record high.
Service jobs have been hit the hardest in the current crisis, with workers at hotels and restaurants being among the first to be let go. However, as the economic fallout solidifies, white-collar workers could also begin to feel the impacts and face unemployment, the report notes.
“As shutdowns continue, job losses will likely extend into other areas of the labor market, such as business and professional services where firms may begin to see lower revenues from a second order pull back in demand,” Robard Williams, a senior vice president for Moody’s Investors Service told CNN.
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