The economic toll from the coronavirus (COVID-19) continues to accelerate. The Labor Department reports that initial claims for unemployment benefits surged to 6.6 million for the week ending March 28.
That’s double the number who sought unemployment benefits during the previous week, as the virus began to force businesses to close and lay off employees. The previous week’s number had also been a record.
In fact, the government revised last week’s number upward by 24,000 workers. The Labor Department’s four-week moving average was 2,612,000, an increase of 1,607,750 from the previous week's revised average. The previous week's average was revised up by 6,000 from 998,250 to 1,004,250.
Financial analysts on Wall Street were not surprised at the number, and it seemed to have no effect on stock futures when it was announced. Some analysts expect as many as 20 million Americans could lose their jobs as a direct result of the pandemic.
This week, an analysis from the St. Louis Federal Reserve Bank estimated that the nation’s unemployment rate -- which stood at 3.5 percent in February -- could reach 32 percent before the economy begins to recover.
Better benefits under new law
It may be small consolation to those who have lost jobs, but unemployment benefits have just gotten more generous. President Trump signed the CARES Act on March 27, increasing and extending jobless benefits.
In most states, employees laid off before December 31 can receive unemployment benefits for 39 weeks instead of the previous 26-week limit. The new law also waives the one-week waiting period that most states require.
Those unemployment checks will also be bigger. The CARES Act adds $600 a week to workers’ benefits during the first four months of unemployment.
Finally, the law allows workers in the gig economy to file for unemployment benefits. Previously, these workers were not covered.