Business April 9, 2020

U.S. Loses 10% Of Workforce In Three Weeks

HIALEAH, FLORIDA - APRIL 08: Miguel Diaz, who works for the City of Hialeah, hands out unemployment applications to people in their vehicles in front of the John F. Kennedy Library on April 08, 2020 in Hialeah, Florida. The city is distributing the printed unemployment forms to residents as people continue to have issues with access to the state of Florida’s unemployment website in the midst of widespread layoffs due to businesses closing during the coronavirus pandemic. (Photo by Joe Raedle/Getty Images)

The jobless claims continue to surprise analysts and not in a good way. Once against the number of those who filed was higher than expected. Thursday morning. the Labor Department reported, “In the week ending April 4, the advance figure for seasonally adjusted initial claims was 6,606,000.” That’s a decrease of 261,000 from the previous week, but higher than the estimate of 5 million claims.

CNBC points out, “That brings the total claims over the past three weeks to more than 16 million. If you compare those claims to the 151 million people on payrolls in the last monthly jobs report, that means the U.S. has lost 10% of the workforce in three weeks.” And with all the problems people have had filing claims, analysts say the actual number of people out of work or furloughed may be even higher than what is being reported.

"This is a savage number," says @Austan_Goolsbee on jobless claims. "This is probably still an underestimate of what the unemployment situation is because in state after state you've completely overloaded the unemployment insurance system." pic.twitter.com/Xo20WKShxw
— Squawk Box (@SquawkCNBC) April 9, 2020

The Wall Street Journal cautions:

Each additional week of historically high jobless claims dims the prospects for a rapid economic recovery once the new coronavirus is contained in the U.S. and businesses start reopening.
“The biggest direct impact of the loss of jobs is going to be the loss of income and therefore the loss of spending,” said Jacob Robbins, assistant professor of economics at the University of Illinois at Chicago.

And the WSJ points out layoffs are hitting more and more industries:

Take Oregon as an example. In the week ended March 21, slightly more than 30% of the state’s jobless claims were from laid-off workers in the restaurant industry. In the week after, the share of claims from restaurant employees remained roughly the same, but the portion of claims coming from health-care and retail workers rose.