A record 26 million Americans likely sought unemployment benefits over the last five weeks, confirming that all the jobs created during the longest employment boom in U.S. history were wiped out in about a month as the novel coronavirus savages the economy.
Thursday’s weekly jobless claims report from the Labor Department will add to a growing pile of increasingly bleak economic data. It will come amid rising protests against nationwide lockdowns to control the spread of COVID-19, the potentially lethal respiratory illness caused by the virus.
President Donald Trump, who is seeking a second term in the White House in November’s general election, has been anxious to restart the paralyzed economy. Trump on Wednesday applauded steps taken by a handful of Republican-led states to begin reopening their economies, despite warnings from health experts of a potential new surge in infections.
“The U.S. economy is hemorrhaging jobs at a pace and scale never before recorded,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “It compares to a natural disaster on a national scale.”
Initial claims for state unemployment benefits probably totaled 4.2 million in the week ended April 18, according to a Reuters survey of economists. Still a figure that would have been seen as unimaginably high less than two months ago, it would be lower than the previous week’s 5.245 million. Estimates in the survey for Thursday’s data were as high as 5.50 million.
Based on the median forecast, last week’s claims data would bring the cumulative unemployment benefits claims to roughly 26.2 million since the week ending March 21, representing about 16% of the labor force. The economy created 22 million jobs during the employment boom which started in September 2010 and abruptly ended in February this year.
Last week’s claims report covered the period during which the government surveyed business establishments for the nonfarm payrolls component of April’s employment report. Economists are forecasting as many as 25 million jobs were lost in April after the economy purged 701,000 positions in March, which was the largest decline in 11 years.
“It wipes out all the job gains during the long expansion,” said Joseph Brusuelas, chief economist at RSM in New York. “Once the economy begins to reopen initial claims will slow, but we have to be honest, not everyone is going to get their jobs back.”