Daily Management Review

Economists Expect New Record For US Weekly Jobless Unemployment Claims


Economists Expect New Record For US Weekly Jobless Unemployment Claims
For a second straight week now, the number of Americans who have filed for claims for unemployment benefits has potentially set another all time record as stay at home orders are imposed in more and more states in the United States to prevent the spread of the coronavirus pandemic which has already pushed the US economy – the largest in the world, in to a recession. 
It is expected that the jobless claims data that is to be published by the US Labor Department for the last week will be more than the number of claims for unemployment benefits that were filed by Americans the week earlier when the American economy noted total clam of 3.3 million, the highest ever for the country in a single week. The numbers also potentially also support claims of some economists that the long running boom in the US hobs market had come to its end by March.
A couple of weeks ago, some form of lockdown was imposed on about 50 per cent of Americans which has now increased to more than 80% of the residents. The ever increasing number of claims for unemployment has left the state employment offices overwhelmed.
With almost 188,000 confirmed cases of Covid-19, the respiratory disease that is caused by he coronavirus, the United States currently has the highest number of confirmed cases. According to government reports, more than 4,000 people have been killed by the viral infection in the country so far.
"The U.S. labor market is in free-fall," said Gregory Daco, chief U.S. economist at Oxford Economics in New York. "The prospect of more stringent lockdown measures and the fact that many states have not yet been able to process the full amount of jobless claim applications suggest the worst is still to come."
According to a Reuters survey of economists, the initial claims for state unemployment benefits probably shot up to a seasonally adjusted 3.50 million for the week ended March 28. The upper level of the estimates by economists was at a total of 5.25 million Americans claiming for unemployment benefits.
Additionally, there are many American states that have reported challenges processing applications, therefore economists claim that the number of unemployment benefits is likely to also be revised higher for the week ended March 21.
The last record for unemployment benefit claims in the US set at 665,000 during the 2007-2009 recession – when a total of more than 8.7 million jobs were lost during the entire period of the recession.
"Why work when one is better off not working financially and health wise?" said a Sung Won Sohn, a business economics professor at Loyola Marymount University in Los Angeles.
For last week, the claims for unemployment benefits could top 5.50 million, predicted the Bank of America Securities. Calculating the number based on its tracking of reports from states and its own data models.
"Based on our read, 22 states are expecting approximately 2.5 million unemployment insurance claims, up from the prior week's official nonseasonally adjusted figures of 1.4 million," said Joseph Song, a U.S. economist at Bank of America Securities in New York.
"Meanwhile, several other states have given general guidance that claims will be higher in the upcoming report. A rough back-of-the-envelope calculation extrapolating out to all 50 states would imply close to 5.6 million new applications."