Americans are starting to lose their jobs in response to the coronavirus pandemic, and economists expect it’s only going to get worse from here. And quickly, too.
Early Thursday, a government report showed 281,000 Americans filed for their first week of unemployment benefits last week. It was a sudden 33% jump over the week before and the biggest percentage increase since 1992.
Goldman Sachs economists predict by as early as next week, 2.25 million Americans will for their first week of unemployment benefits — eight times the number of people who filed last week and the highest level on record.
“It’s more than double anything we saw on a percentage basis during the height of the Great Recession, and it’s going to get exponentially worse, much as the testing reveals the virus is spreading,” said Diane Swonk, chief economist at Grant Thornton.
Swonk said the 33% jump in weekly claims is the biggest one week increase ever, aside from temporary disruptions from hurricanes and other natural disasters. It dwarfs the one-week 14% jump during the 2008 financial crisis. Swonk said she now expects unemployment to rapidly rise to 8% from the current half-century low 3.5%.
“We’re talking about it going up by multiples of the level in weeks to come. We’re talking about it doubling, tripling. We could see it up to 600,000 by next week,” she said, adding some states are already seeing new claims activity for this week of as high as 40,000.
