- US jobless claims were off the charts at 3.28 million last week
- Increase of 3 million from the previous week (nearly 2% of labour force)
- $2 trillion stimulus package includes badly-needed enhancements to unemployment benefits
Today’s initial claims figure was at the upper end of the wide range of market expectations. In any case, it’s absolutely shocking to see 2% of the US labour force making jobless claims in a single week. The number highlights just how quickly some sectors of the economy have essentially ground to a halt. The Department of Labor noted that nearly every state cited coronavirus impacts—in service industries broadly and most significantly accommodation and food services. Health and social, arts and entertainment, transportation and warehousing, and manufacturing were also hit hard.
The scale of layoffs underscores the need for more generous unemployment insurance to help people through this unprecedented period of economic disruption. The $2 trillion stimulus package passed by the Senate last night (the House will vote on Friday) eases eligibility requirements, removes a one-week waiting period, and includes a federal top-up to state benefits. It also provides funding for administrative costs to help state offices that are clearly being inundated with new claims.