When Americans lose their jobs, they file for unemployment benefits, and the government has kept track of the number of these filings every week since 1967. Up until very recently, with a healthy domestic job market, the weekly tally has been about 210,000.
But as we discussed last week, looking at historical data, we know what things look like when there’s an economic crisis. In early 2009, for example, near the height of the Great Recession, initial jobless claims reached 665,000 — roughly triple the totals from, say, a couple of months ago. During the U.S. recession in 1982, the number was a little higher, reaching nearly 700,000.
Last week, as the economy began to shut down in response to the coronavirus crisis, unemployment claims topped 3 million. As staggering — and record-breaking — as that number was, it was the first punch to the gut. This morning, the Department of Labor delivered the second.
In the week ending March 28, the advance figure for seasonally adjusted initial claims was 6,648,000, an increase of 3,341,000 from the previous week’s revised level. This marks the highest level of seasonally adjusted initial claims in the history of the seasonally adjusted series. The previous week’s level was revised up by 24,000 from 3,283,000 to 3,307,000.
Note, these 6.65 million filings are separate from last week’s tally. In other words, over 3.3 million Americans lost their jobs and filed for unemployment, and then over the course of the seven days that followed, 6.65 million additional Americans — double last week’s number — did the same thing.
To be sure, we expected this report to be horrible. A recent Dow Jones survey projected today’s report would show 2.65 million filings. A Reuters survey of economists offered a range of opinions, with the most pessimistic projections going as high as 5.25 million. Other predictions estimated 5.6 million.
But the actual number was much worse than each of those projections.
It is worth emphasizing that these depression-level numbers coincide with the passage last week of an economic aid package that included significant resources for the unemployed. As we reviewed earlier in the week, the provisions of the new law add $600 — per week — to whatever out-of-work Americans would get from their state UI system. It’s a temporary lifeline that will make a significant difference to a lot of people.
I put together the above chart, and at the request of some readers, it shows weekly unemployment filings since 1967, when the federal government started keeping track. The image may make it appear as if the last half-century has been relatively stable, but that’s really not the case: there were significant peaks and valleys throughout this period.
But those fluctuations now seem minor by comparison.
Postscript: Don’t forget, the overall jobs report for March will come out tomorrow morning. It won’t be pretty, but it also probably won’t show the full impact of the crisis.
