U.S. unemployment claims surged by 3.28 million last week, the highest number ever recorded in a single week and more than quadruple the previous record, according to Labor Department data released Thursday.
The data showed claims surged by over 3 million in a week alone — a stark contrast to a historic low of barely 200,000 unemployment claims just three weeks ago — as the economy struggles amid shutdowns due to the coronavirus pandemic. The previous record was 695,000 claims in October of 1982.
The number shattered forecasts, which ranged from a low of 750,000 to a high of 2,737,000, with a consensus around 1,000,000.
The Labor Department explicitly referenced the coronavirus pandemic as the reason behind the spike.
“Nearly every state providing comments cited the COVID-19 virus impacts. States continued to cite services industries broadly, particularly accommodation and food services,” the DOL said in its release. “Additional industries heavily cited for the increases included the health care and social assistance, arts, entertainment and recreation, transportation and warehousing, and manufacturing industries.”
Initial claims for March 7 showed 211,000 Americans filing for benefits amid a strong economy, followed by 282,000 the week of March 14, before rising dramatically this week. The surge represents a 1500 percent increase in two weeks.
Economists now predict a recession is on the cards for the U.S., with some predicting double-digit unemployment. The highest jobless rate during the Great Recession, which ended in 2009, was 10 percent.
The Senate unanimously passed a historic $2 trillion relief package late Wednesday which includes $250 billion earmarked for direct payments to Americans — amounting to $1,200 for individuals, $2,400 for married couples, and $500 for each child under age 17 — as well as a robust expansion of unemployment benefits.