US unemployment claims hit record amid coronavirus lockdown

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(BBC) – The number of people without jobs in the US has surged to a record high as the economy goes into lockdown due to the coronavirus pandemic.

Nearly 3.3 million people registered to claim unemployment benefits for the week ended 21 March, according to Department of Labor data.

The previous record was set in 1982, when unemployment claims hit 695,000.

The spike marks an abrupt end to years of slow and steady job market expansion.

US unemployment benefits claims

It comes as officials in states across the country close restaurants, bars, movie theatres, hotels and gyms. Car firms have halted production and air travel has fallen precipitously. According to economists, a fifth of the workforce is on some form of lockdown.

State officials, who process unemployment claims, have reported being overwhelmed by requests for the benefits, which analysts said means the situation could be even worse than the data currently show.

Ian Shepherdson, chief economist of Pantheon Economics, said he expects to see the unemployment rate increase to to at least 6.5% in March – nearly double the prior rate – and continue to accelerate in future months.

US unemployment

“I’ve been writing about the US economy … since 1996, and this is the single worst data point I’ve seen, by far,” he wrote.

In Washington, Congress is working on a $2tn (£1.7tn) stimulus bill, which includes direct payments of $1,200 (£999) to adults as well as financing for affected industries, such as airlines. The Federal Reserve has also taken unprecedented steps to shore up the economy.

But even with such action, a sharp contraction is inevitable, analysts said.

“Fed action and fiscal measures can only ameliorate the pain and we remain worried that the latter aren’t yet on a sufficient scale,” Mr Shepherdson wrote.

Last month, US unemployment was hovering near historic lows. As recently as three weeks ago, the number of jobless claims was only about 210,000 and President Donald Trump was trumpeting the labour market’s health on Twitter.

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