U.S. Unemployment Filings Soar Above 40 Million Amid Virus Panic

More than 2.1 million Americans applied for unemployment benefits last week, pushing the total number of people who have lost their jobs amid the coronavirus panic above 41 million.

The new Labor Department report, which covers the week ending May 23, shows jobless loss since the virus was declared a pandemic hit a rate unseen since the Great Depression.

But the report offered a few glimmers of hope. First-time claims for unemployment benefits, at 2.1 million, is the lowest total since the coronavirus crisis began. In fact, last week’s numbers marks the eighth week in a row that jobless claims declined since the week ending March 25, when first-time claims hit nearly 7 million.

And not all of those who have lost jobs remain unemployed.

“Continuing claims, or those who have been collecting for at least two weeks, numbered 21.05 million, a clearer picture of how many workers are still sidelined. That number dropped sharply, falling 3.86 million from the previous week,” CNBC reported. “The insured unemployment rate, which is a basic calculation of those collecting benefits vs. the total labor force, came down sharply to 14.5% from 17.1% the previous week,” the outlet notes.

“Although initial claims are declining, the pace may only be plateauing,” Daniel Zhao, senior economist at Glassdoor, told Fox News. “If [unemployment] claims remain in the millions for the next few weeks, it may signal that relaxed state-mandated restrictions alone aren’t enough to staunch the flow of unemployed Americans.”

But the Congressional Budget Office (CBO) last week offered a bleaker picture. The non-partisan government agency said the lockdowns will hamper the U.S. economy through next year, inflicting long-term damage to business investment and the labor market.

The office forecast that the nation’s gross domestic product (GDP) will plunge 38% in the second quarter of the year, which would be the worst drop on record. And by the end of 2020, the CBO said 26 million more Americans will be unemployed at the end of the year, more than triple the number of job losses that occurred during the 2008 financial crisis.

“The economy is expected to begin recovering during the second half of 2020 as concerns about the pandemic diminish and as state and local governments ease restrictions,” the CBO report states. “The labor market is projected to materially improve after the third quarter—hiring will rebound and furloughs will drop significantly as the degree of social distancing diminishes. To account for the chances of the pandemic persisting or reemerging, CBO projects that social distancing will continue, but to a declining degree. The persistence of social distancing will keep economic activity and labor market conditions suppressed for some time.”

“Over the 2020–2021 period, economic activity is projected to fall by the greatest amount in the second quarter of 2020, because of the pandemic and the social distancing measures,” the CBO projects. “Real GDP—or real output—is projected to pick up during the second half of the year, and labor market conditions are expected to materially improve after the third quarter as concerns about the pandemic diminish and as state and local governments ease stay-at-home orders, bans on public gatherings, and other measures. The recently enacted laws will contribute to the moderate rebound in economic activity by boosting consumer spending and by preserving some connections between workers and employers so that firms can ramp up operations more quickly as the degree of social distancing subsides. Nonetheless, challenges in the economy and in the labor market are expected to persist.”