Coronavirus: US jobless claims soar to record 3.3 million over shutdown | Business News

US unemployment claims rocketed to a record 3.3 million last week as a result of the widespread economic shutdown caused by coronavirus.

The dramatic figure comes after tough restrictions aimed at curbing the pandemic led to a wave of redundancies and signalled the likely end to the longest employment boom in US history.

The surge in weekly applications – more than quadruple the previous record set in 1982 – reflects the damage the outbreak is doing to the economy, the scale of lay-offs threatening to speed up the decline into recession.

Revenues have collapsed at restaurants, hotels, cinemas, gyms, and airlines.

Car sales have also plummeted and manufacturers have shut factories.

As job losses mount, some economists believe the unemployment rate could hit 13% by May.

The highest jobless rate in the wake of the financial crash in 2009 was 10%.

“What seemed impossible just two weeks ago is now reality,” said Nancy Vanden Houten, an economist at the consulting firm Oxford Economics.

“The US economy will experience the largest economic contraction on record with the most severe surge in unemployment ever.”

Only in February, the unemployment rate was at a 50-year low of 3.5% and the economy was continuing to grow.

In its report, the Labor Department said 3.3 million people applied for unemployment benefits last week, up from 282,000 during the previous week.

However, many people who have lost jobs in recent weeks have been unable to claim because state websites and phone systems have been overwhelmed by a crush of applicants and have frozen up.

That logjam suggests the latest figure underestimates the magnitude of job cuts last week.

Workers who are not on company payrolls, such as the self-employed, are not currently eligible for unemployment benefits even though in many cases they are no longer able to earn money.

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Sky News

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