Economic Outlook

3.3M Jobless Claims Filed Nationwide, 188K in Ohio

By CHRISTOPHER RUGABER AP Economics Writer
WASHINGTON (AP) — Nearly 3.3 million Americans applied for unemployment benefits last week — more than quadruple the previous record set in 1982 — amid a widespread economic shutdown caused by the coronavirus.

The surge in weekly applications was a stunning reflection of the damage the viral outbreak is inflicting on the economy. Filings for unemployment aid generally reflect the pace of layoffs.

Layoffs are sure to accelerate as the U.S. economy sinks into a recession. Revenue has collapsed at restaurants, hotels, movie theaters, gyms, and airlines. Auto sales are plummeting, and car makers have close factories. Most such employers face loan payments and other fixed costs, so they’re cutting jobs to save money.

As job losses mount, some economists say the nation’s unemployment rate could approach 13% by May. By comparison, the highest jobless rate during the Great Recession, which ended in 2009, was 10%.

For the week ending March 21, the Ohio Department of Job and Family services reported 187,780 initial jobless claims to the U.S. Department of Labor. One week before, the state number was 7,042 claims.

The 187,780 initial claims filed last week in Ohio topped the number filed in December 1982, but not in December 1981, when a record 205,159 claims were filed.

As recently as February, the national unemployment rate was at a 50-year low of 3.5%. And the economy was growing steadily if modestly. Yet by the April-June quarter of the year, some economists think the economy will shrink at its steepest annual pace ever — a contraction that could reach 30%.

In its report Thursday, the Labor Department said 3.283 million people applied for unemployment benefits last week, up from 282,000 during the previous week. Yet many people who have lost jobs in recent weeks have been unable to file for unemployment aid because state websites and phone systems have been overwhelmed by a crush of applicants and have frozen up.

That logjam suggests that Thursday’s report actually understates the magnitude of job cuts last week. So does the fact that workers who are not on company payrolls — gig workers, free-lancers, the self-employed — aren’t currently eligible for unemployment benefits even though in many cases they’re no longer able to earn money.

With layoffs surging, a significant expansion of unemployment benefits for the millions who will lose jobs as a result of the coronavirus outbreak was included in an economic relief bill nearing final approval in Congress. One provision in the bill would provide an extra $600 a week on top of the unemployment aid that states provide. Another would extend 13 additional weeks of benefits beyond the six months of jobless aid that most states offer.

The new legislation would also extend unemployment benefits, for the first time, to gig workers and others who are not on company payrolls.
Separate legislation passed last week provides up to $1 billion to states to enhance their ability to process claims. But that money will take time to be disbursed.

In California, claims for unemployment benefits more than tripled last week to 187,000. In New York, they rose by a factor of five to 80,334. Nationwide, about 2.25% of the entire workforce applied for jobless aid last week. In Nevada, the figure was 6.8%, in Rhode Island 7.5%.

The benefits will take time to kick in. It typically takes two to three weeks before applicants receive any money. State agencies must first contact their former employers to verify their work and earnings history. Only then can the employee’s weekly unemployment benefits be calculated.

Worsening the problem, most state agencies that handle unemployment claims are operating at historically low funding levels and staffing that are intended to handle a trickle of claims. Just weeks ago, the job market was in the strongest shape it had been in decades.

OJFS urges individuals to file their claims online, if possible, at Unemployment.Ohio.gov.

“Each claim is important to us, and we recognize the hardship that the COVID-19 pandemic has placed on many Ohio families,” the state agency said in a statement issued this morning with the latest numbers. “We have been working around the clock to streamline performance and boost capacity by adding servers so the online claims system can handle the unprecedented influx of claims, which has affected processing times.

“It’s important to keep in mind that during previous downturns in the economy, claims came in waves as the recession worsened and industries began to shut down whereas these claims came in all at once and created a tsunami. This amount of claims in this short expanse of time would tax any online system, especially one that is 16 years old. It’s also important to note that unemployment insurance automated systems around the country are also struggling with the increased claims load,” the statement concluded.

Pictured at top: People wait in line March 17 for help with unemployment benefits at the One-Stop Career Center in Las Vegas. (AP Photo/John Locher, File)

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