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US jobless claims soar beyond 3 million as Covid-19 layoffs hit

New York
More than three million Americans filed new claims for unemployment insurance last week, shattering the previous record as the first wave of coronavirus layoffs hits the United States economy.
Some 3.283 million people filed initial jobless claims for the week ending March 21, the US Bureau of Labour Statistics said on Thursday. The tsunami of layoffs swamped the previous record of 695,000 newly jobless set in October of 1982.
“Nearly every state providing comments cited the COVID-19 virus impacts,” the BLS said in its release. “States continued to cite services industries broadly, particularly accommodation and food services.”
Other industries heavily cited by states as sources of newly unemployed include healthcare and social assistance, arts, entertainment and recreation, transportation and warehousing, and manufacturing.
Though the figure was at the high end of analysts’ estimates, it understates the true scope of pain workers in the US are experiencing as coronavirus containment measures shutter businesses and throw millions out of work.
Overwhelmed by the demand to submit applications, state unemployment office websites have been crashing throughout the US, while phone lines have been jammed. Then there are the millions of people in the US who currently do not qualify for unemployment benefits - the self-employed, those who are paid under the table in cash, and many undocumented workers.
Many economists had predicted an historic spike in jobless claims as large sectors of the US economy grind to a halt in an effort to stem the spread of COVID-19. The first wave of jobless workers is just showing up in the data.
The $2 trillion coronavirus economic relief bill passed unanimously by the US Senate on Wednesday includes key measures to help American workers cope financially with layoffs triggered by the pandemic and help ensure that they have a job to return to when business activity resumes.
The bill allocates $377bn to provide small businesses with loans that they will not need to repay if the proceeds are used to pay employee wages or other necessities.
A provision for loans and loan guarantees for industries hardest-hit by coronavirus requires each recipient to maintain at least 90 percent of its workforce as of March 24 through September 2020.
The legislation also adds a $600 federal top-up payment to state unemployment benefits, and would extend those benefits to self-employed and part-time workers.
Mounting layoffs and a sinking economy have prompted President Donald Trump to push for businesses to reopen by Easter. Given rising infections and a mounting death toll, many health experts, economists and politicians have argued against such a move.
Fed Chair Jerome Powell said on Thursday in an interview on NBC’s Today Show that the economy “may well be in recession” but progress in controlling the spread of the coronavirus will dictate when the economy can fully reopen.
The dollar was trading lower against a basket of currencies. Prices of US Treasuries rose and major US stock indexes opened higher.