Here’s why there’s a backlog of claims for unemployment and why it’s only getting worse.
The number of Americans filing new unemployment claims will likely continue to drop, but it’s still expected to reach the millions as the economic toll from the coronavirus pandemic ticks on.
Between 2.3 million and 2.8 million Americans filed initial applications for unemployment insurance last week, economists estimate. That’s down from the 3 million who filed claims the week before and the record 6.9 million who sought assistance in late March.
But if the latest tally, which the Labor Department reports on Thursday, matches estimates, it will mean roughly 39 million Americans have applied for unemployment in just nine weeks, a staggering number that reflects a jobless rate that is the highest since the Great Depression.
“The labor market continues to struggle amid the COVID-19 pandemic and filings for unemployment benefits are likely to remain at elevated levels even as some states begin to gradually reopen their economies and ease back some social distancing measures,” BofA Research said in an investors note.
A record 20.5 million jobs were lost in April, according to the Labor Department, spiking the unemployment rate to 14.7%. That more than tripled the 4.4% unemployment rate reported in March and the 3.5% unemployment rate in February that represented a 50-year low.
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In the initial weeks of the pandemic, workers in the retail, hospitality and leisure sectors bore the brunt of job losses as stay-at-home orders were put in place, and travel ground to a virtual halt.
But the fallout from the pandemic is now rupturing other industries. Recently, companies such as Uber and General Electric have laid off thousands of employees. And construction and the professional services sector have also suffered job cuts.
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