A Tsunami of Layoffs has Made Landfall

According to Thursday's Unemployment Insurance Weekly Claims Report, 3.28 million Americans filed for unemployment insurance in the week ending March 21, completely shattering the previous record (695K in 1982). But that is an undercount of the job losses suffered that week.

The number of newly unemployed is likely twice as large

Many people who were laid off or furloughed did not know they were eligible for unemployment insurance benefits. Others will take time to digest their new reality and apply.

Workers who are self-employed, gig workers, or recent hires, or who saw their hours cut were not eligible for benefits until the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on Saturday, March 28.

Many eligible workers who attempted to apply were unable to access benefits due to long waits and jammed phone lines. State unemployment insurance systems, accustomed to processing record-low numbers of claims in recent years, were simply not prepared to deal with the deluge of calls.

1.5 years of job gains were wiped out in one week

For a sense of the magnitude of the number of newly unemployed, the economy created 2.1 million net new jobs in 2019. The losses sustained during the week ending March 21 alone are 1.5 times as large.

For the past 113 months, the economy has gained about 200K more jobs than it has lost each month. That changed in a flash in mid-March as a tsunami of COVID-19-related layoffs made landfall.

And the fast-moving wave has done much more damage this past week, which will be reflected in this coming Thursday's data release.

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