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Unemployment Claims Spike as Coronavirus Outbreak Forces Layoffs

A homeless person shelters from the rain under a movie theater sign during the coronavirus outbreak in Encinitas, Calif., March 18, 2020. (Mike Blake/Reuters)

Unemployment claims shot to the highest level in years last week as the coronavirus pandemic continued to spread across the country, forcing businesses to shut down and lay off thousands of workers.

The Labor Department reported 281,000 new claims for unemployment insurance for the weeks of March 8, a spike of 70,000 from the previous week that the department said is “clearly attributable to impacts from the COVID-19 virus.”

The week marked the highest level of new claims since September, 2017, when 299,000 initial claims were filed. The uptick in claims has left some states including New York, California, Massachusetts, Ohio, Texas, and Illinois scrambling to face dwindling capital.

Some states were hit particularly hard as businesses in the restaurant and bar, retail, entertainment, travel, and hospitality industries are ordered to close temporarily to stem the spread of the virus, a respiratory illness that has infected more than 8,300 people in the U.S. and killed at least 147 patients.

The rising numbers continued into this week, with Colorado seeing thousands of new unemployment insurance claims filed Monday, Tuesday, and Wednesday, compared to just 400 the previous Monday. About 15,000 people applied for unemployment benefits in New Jersey on Monday, compared to the usual level of about 1,250, and Pennsylvania saw 50,000 claims on Monday alone, compared to about 12,000 claims during the entire first week of March.

President Trump on Wednesday signed a second coronavirus aid package that includes $2 billion to state unemployment insurance programs. A massive $1 trillion “phase three” stimulus package still being worked on by congressional Republicans would include two rounds of direct payments to Americans totaling $250 billion each starting April 6.

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