COVID-19, or the novel coronavirus, pandemic has caused massive job loss and economic fallout across the U.S. and around the world. Major companies have been forced to lay off workers and issuing furloughs or reduced hours just to keep the remaining workforce they have.
According to the U.S. Department of Labor, another 6.6 million people filed for unemployment benefits
last week, increasing the total number of claims to 16.8 million or roughly 11% of the entire country’s workforce. It was the second-largest number of initial unemployment claims in history since the Department of Labor started tracking the data in 1967.The influx of claims has put a strain on state governments trying to keep up with the overwhelming demand. “The backlog of
filings at the UI offices, [and] reports that some unemployment offices have people lined up outside to apply for benefits, shows how stressed the system is,” Jennifer Lee, senior economist at BMO, told CNN.Economists, who expect job losses and reductions to continue, say the
unemployment rate will peak in the double digits in the next few months. The current rate is up from 4.4% in March. Bank of America economists predict employers will eventually cut between 16 million and 20 million jobs due to the coronavirus, with the unemployment rate peaking of 15.6% between now and June. JPMorgan economists cut their second-quarter forecast even more. They now expect the economy will decline by 40%, which could take years to repair post-pandemic.“This week’s unemployment insurance claims are yet another indication of the recessionary dynamics created by the coronavirus pandemic,” Moody’s senior vice president Robard Williams wrote in a email, according to CNN. The government hopes its economic relief package and policies by the Federal Reserve, which include an additional $2.3 trillion in loans, will soften the blow a little bit.