The nearly 3.17 newly submitted unemployment claims in the US last week has pushed figures to record numbers as the economic slump in the country deepens amid the coronavirus pandemic. The US Labor Department reported on Thursday that the total amount of unemployment claims filed in the country since the start of the crisis has now reached more than 33 million.
The newly added figure reported by the agency covers the week ending on May 2. The agency claims that the continued shelter-in-place orders and the closure of hundreds of businesses have forced unemployed Americans to seek government assistance. After more than seven weeks of continued restrictions, most have already burned through their savings and are now dependent on government aid.
The rising number of unemployment claims has essentially erased all of the jobs created over the past decade, with the scale far surpassing those recorded during the Great Depression. The four-week moving average of claims had surged by 17.1 million during the latest week, an increase of over 3.8 million.
A separate report published by the payroll processing firm ADP, released on Wednesday, estimated that the US may have shed up to 20.2 million private-sector jobs over the last month alone. The report revealed that most of the jobs that were lost were those in the service sector, one of the heaviest hit by the restriction caused by the pandemic. Analysts had pointed out that ADP's estimates could be lower than the actual figures as the data that it had collected was only up to April 12.
With the massive surge in people seeking to get unemployment benefits, the Labor Department's offices are now struggled to process the claims. Almost half of the US states are also now reporting a massive decline in their allocated insurance programs, with most now depending on the country's federal stimulus packages to continue paying laid-off workers.
Earlier in the week, California became the first state to officially tap into federal aid in order to keep paying out unemployment benefits. The state borrowed a total of $348 million from the package. The states of Connecticut and Illinois are both expected to follow suit as their budgets run out.
Federal Reserve Chairman Jerome Powell had stated that the economy could plummet further during the second quarter of the year. He added that it may take longer than expected for the economy and the labor market to return to pre-pandemic levels. Powell issued a warning to governors that opening too quickly may boost economic growth but it will likely not accelerate its full recovery.
