Here’s why there’s a backlog of claims for unemployment and why it’s only getting worse.
Layoffs fueled by the coronavirus pandemic continue to mount.
About 2.4 million Americans filed initial unemployment benefit claims last week, the Labor Department said Thursday, as the health and economic crisis sparked by the coronavirus ruptures a growing number of industries.
In just nine weeks, 38.6 million have sought jobless benefits that represent the nation’s most reliable gauge of layoffs.
The latest claims tally was down from the 3 million who filed claims the week before, and the record 6.9 million who sought assistance in late March. Initial applications for unemployment insurance have now steadily declined seven weeks in a row.
But the tens of millions of Americans who have applied for assistance in just over two months is a staggering number, reflecting a 14.7% 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.
In the early weeks of the pandemic, the retail, hospitality and leisure sectors were especially hard hit as stay-at-home orders were put in place, stores and restaurants closed, and travel ground to a virtual halt.
But the pandemic’s toll is now rippling out to other industries. More recently, companies such as Uber and General Electric have laid off thousands of employees. Construction and the professional services sector have also suffered job cuts.
A record 20.5 million jobs were lost in April, according to the Labor Department, leading to an unemployment rate that more than tripled the 4.4% jobless rate reported in March, and the 3.5% unemployment rate in February that represented a 50-year low.
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