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Another record-breaking number of Americans may have applied for unemployment benefits for the third week in a row in the first week of April, potentially pushing total job losses due the coronavirus pandemic to more than 15 million.
Initial jobless claims in the seven days running from March 29 to April 4 likely rose by 6 million, according to the latest MarketWatch survey of economists. The report is published Thursday morning at 8:30 a.m. Eastern time.
Yet some forecasters think the latest batch of unemployment applications could even top last week’s astonishing 6.65 million tally. The estimates of economists polled by MarketWatch range as high as 7 million.
Just a month ago, new claims were in the low 200,000s per week and sat near a half-century low.
Read: Expanded unemployment benefits: Who qualifies, how to apply
The onslaught of layoffs and furloughs is expected to continue for at least several weeks with large parts of the U.S. economy shut down.
“Some states believed the worst was yet to come,” analysts at Bank of America Merrill Lynch told clients after reviewing the situation across the country.
Read:Being furloughed beats layoffs: What it means for millions of now jobless workers
Other problems are also hindering an accurate count of new jobless claims.
Many states are still experiencing trouble handling the record flood of claims. And there are reports that some states are either rejecting or not processing applications that are now eligible under an emergency federal law that would have not qualified for relief in the past.
Self-employed people such as Uber UBER, +6.79% drivers or freelance writers, for example, are now eligible for benefits. They would not have previously qualified because they do not contribute to the state-federal unemployment compensation fund like all companies do.
“There are widespread reports of claims being delayed or wrongly rejected due to dilapidated state IT systems,” noted senior U.S. economist Andrew Hunter of Capital Economics.
Eventually those claims will be processed correctly and added to the totals.
See:Applications for unemployments benefits spiking in every state. Here’s a breakdown
Whatever the case, economists believe total job losses in the U.S. will range from 16 million to 25 million, assuming the economy only remains shut down for another month or two. The losses could go much higher the longer the crisis lasts, however.
Read:Big increase in jobless benefits to give millions of laid-off workers higher pay
Economists say the unprecedented surge in unemployment has already pushed the unemployment rate above 10% — much higher than the officially reported 4.4% rate in March.
The current pace of job losses suggest the unemployment rate will soon move past 15% and perhaps even exceed 20%, coming close to levels last seen during the Great Depression in the 1930s.
Read:The soaring U.S. unemployment rate could approach Great Depression-era levels
By contrast, unemployment never topped 10% during the worst of the 2007-2009 downturn that has become known as the Great Recession. No more than 6.6 millions Americans drew unemployment benefits at any one time during the last recession and unemployment peaked at 15.3 million.
Read:Trillions in coronavirus spending could explode deficits to World War II levels
U.S. stocks were rising on Wednesday, a day after the Dow and S&P 500 staged their biggest reversals since the 2008 financial crisis, as investors hoped that the U.S. could roll back containment measures put in place to fight the COVID-19 pandemic sooner than expected.
The Dow Jones Industrial Average DJIA, +2.51% was up 2.53%, the S&P 500 index SPX, +2.37% gained 2.38% and the Nasdaq Composite Index COMP, +2.03% 2.06%.
