That’s a record for one week as businesses shut down because of the coronavirus pandemic.
WASHINGTON — A record 3.3 million Americans applied for unemployment benefits last week, the Labor Department said Thursday, as restaurants, hotels, barber shops, gyms and more shut down in a nationwide effort to slow the spread of the deadly coronavirus.
Last week saw the biggest jump in new jobless claims in history, surpassing the record of 695,000 set in 1982. Many economists say this is the beginning of a massive spike in unemployment that could result in over 40 million Americans losing their jobs by April.
Laid off workers say they waited hours on the phone to apply for help. Websites in several states, including New York and Oregon, crashed because so many people were trying to apply at once.
Bank of America predicted 3 million people would apply for unemployment benefits last week, but even Wall Street’s expectations were too low for how much the coronavirus is slamming the economy.
This is “widespread carnage,” said Jacob Robbins, an assistant economics professor at the University of Illinois at Chicago, “And it’s going to get worse.”
The nation’s unemployment rate was 3.5 percent in February, a half-century low, but that has likely risen already to 5.5 percent, according to calculations by Martha Gimbel, a labor economist at Schmidt Futures. The nation hasn’t seen that level of unemployment since 2015.
“This morning’s jobless claims confirm that the United States is in the thralls of a catastrophic unemployment crisis, the likes of which we haven’t seen since the Great Depression,” said Andrew Stettner, a senior fellow at the left-leaning Century Foundation.
Layoffs skyrocketed after President Donald Trump declared that no more than 10 people should gather together at once time, effectively forcing restaurants and other public places to close. But health experts say it is necessary to keep people home to slow the spread of the virus and prevent people from dying.
“We may well be in a recession,” said Federal Reserve Chair Jerome Powell in his first appearance on morning television. “The first order of business is to get the virus under control and then resume economic activity.”
A lot of workers are not allowed to apply for unemployment benefits, meaning the true number of layoffs so far due to the coronavirus is likely far higher than 3.3 million. Self-employed workers, gig workers, students and people who worked fewer than six months last year are typically not eligible to apply for unemployment insurance in most states.
“I haven’t worked since March 13. I am not eligible for unemployment because I’m self-employed,” said Pam Massey, a hairdresser in Gig Harbor, Wash., about an hour south of Seattle. “I had to call my clients and cancel. What am I supposed to do?”
Massey is worried about paying her home mortgage. The salon owner also called her and said her rent is still due for her space at the salon, even though no one is getting a hair cut right now. Massey’s income has dropped to zero. Clients have been begging Massey to come to their homes to cut their hair, but at age 66, she felt the danger was too high.
The Senate approved a massive emergency funding bill late Wednesday that will allow many more workers, including self employed workers like Massey, to apply for unemployment aid. The House is expected to pass the bill Friday and President Trump has indicated he will sign it quickly.
The bill also includes a one-time $1,200 check for people earning less than $75,000 a year. But there’s concern the aid might not reach people fast enough.
“I worried about my mortgage. I’m trying to get ready for retirement. This is going to kill it,” said Massey.
The average unemployment benefit check is currently $385 a week, which is less than half the typical weekly paycheck in the United States. Those checks should rise by about $600 a week once Trump signs the relief bill into law, a substantial increase meant to tide workers over as they are forced to stay home.
Many workers who have lost their jobs or had their hours severely cut back are worried about paying their April mortgage, rent and car payments and what will happen to their health care.
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The Washington Post’s Andrew Van Dam contributed to this story.