- Economists forecast a massive increase in weekly unemployment claims in the US this week due to layoffs caused by coronaviruses.
- Estimates range from 1 million to 4 million unemployment claims for the week ending March 21. The lower end of this range would more than triple from last week's number.
- "This is happening at a pace and on a scale that our brains cannot understand," said Martha Gimbel, economist at Schmidt Futures, Business Insider in an interview.
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New US labor market data released this week provide early insight into how the coronavirus pandemic is harming the economy.
Weekly US unemployment data for the week ending March 21 will be released on Thursday. Economists expect the report to show a massive increase in the number of people applying for unemployment insurance as the first wave of layoffs caused by coronaviruses.
Large corporation estimates range from around 1 million to 4 million unemployment claims for a week in March.
Business Insider / Andy Kiersz
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A number in this area would be a new record and would exceed the current high of nearly 700,000 new unemployment benefits added in a week in 1982. This would also be a more than three-fold increase over the previously submitted applications. for the week ending March 14 unemployment benefits jumped to 281,000, a two-year highand far above economists' estimates.
A number of states have specifically cited layoffs related to COVID-19, the Department of Labor wrote in last week's report. In addition, "many states reported increased layoffs in general service and lodging, food service, and transportation and warehousing industries, regardless of whether COVID-19 was directly identified or not."
The upcoming report is expected to show further damage as it will cover a week in which states have started to take extreme social distance measures and shut down schools, restaurants, and jobs to curb the spread of the virus.
"This is happening at a pace and on a scale that our brains cannot understand," said Martha Gimbel, economist at Schmidt Futures, Business Insider in an interview. "The numbers are literally incredible."
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To make matters worse, Gimbel says that weekly entitlements are actually an enumeration of economic problems, as not everyone is qualified for unemployment. This does not include workers whose working hours have been reduced due to the slowdown caused by the corona virus, self-employed persons and even such No file can be submitted due to the crash of the unemployment website before overuse.
Uncertainty about this week's numbers is higher than usual due to the harsh and sudden effects of the coronavirus pandemic, Michael Baronays chief economist Michael Gapen told Business Insider. The two latest peaks in unemployment claims – 1982 and 2008 during the financial crisis – were much more gradual, he said.
"We make a sound guess at the anecdotal evidence we have," he said. "We think we'll see a lot of layoffs."
Economists have been watching to make their estimates for this week's claims State level news. The Economic Policy Institute has also adopted an expanded model that incorporated country-level changes into Google Trends' search interest for "Unemployment File" to achieve its estimate.
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