Jobless claims soared to a record 3.28 million in the past week, the Labor Department said Thursday, as the coronavirus outbreak affected wide portions of the economy.
The figure was an increase from 281,000 unemployment claims during the previous week in March. And it was more than four times higher than the previous weekly record of 695,000, set in October 1982.
Most economists had forecast about 1.5 million people filing for unemployment benefits. The true number of out-of-work Americans is likely much higher; self-employed people and gig workers don’t file for unemployment benefits.
The Senate late Wednesday night approved a $2.2 trillion economic rescue package that includes $250 billion in expanded unemployment benefits and increased eligibility. It would cover the self-employed and gig workers.
The measure also has $350 billion for small businesses to retain their workforce. The House is expected to vote on the package on Friday; President Trump has said he’ll sign it immediately.
Treasury Secretary Steven T. Mnuchin said on CNBC that the unemployment numbers “are not relevant” right now because the relief package will enable employers to rehire workers.
Federal Reserve Chairman Jerome Powell said Thursday the economy may well be in a recession already.
“We know that economic activity will decline probably substantially in the second quarter,” Mr. Powell said on NBC’s “Today” show. “I would expect economic activity to resume and move back up in the second half of the year.”
He said there is “nothing fundamentally wrong” with the U.S. economy.
“The economy performed very well right through February,” he said. “This is a situation where people are being asked to step back from economic activity, close their businesses, stay home from work. The sooner we get through this period and get the virus under control, the sooner the recovery can come.”
Labor Secretary Eugene Scalia suggested the crisis is another reason to keep President Trump at the helm of the economy.
“We had such a strong economy just a few weeks ago, with record low unemployment and rising wages — and by the way, with a president who helped bring those conditions about and who remains our president and who can help us grow the economy as we pull through this,” Mr. Scalia told Fox Business host Maria Bartiromo.
He said the rise in unemployed Americans is “purposeful.”
“We have purposely decided that some workplaces have to take a pause,” he said. “We’ve never done that before, so that makes this different than other slowdowns we’ve had. It’s purposeful and short-term.”
Erica Groshen, a visiting scholar at the ILR School of Cornell University, said a loss of 3 million to 4 million jobs or more in one month “would dwarf the previous all-time largest decrease in payroll jobs, minus-1.96 million in September 1945, at the end of World War II.”
A former commissioner of Labor Statistics, Ms. Groshen said the jump in claims implies that the unemployment rate in March will increase somewhere in the range of 5.4% to 6.0%. The jobless rate in February was 3.5%.