The United States continues to witness a significant increase in the number of unemployment beneficiaries as a nationwide coronavirus lockdown continues to force layoffs. Data gathered by Learnbonds.com indicates that by the week ending March 28th, 2020, the beneficiaries had skyrocketed by 338% to an all-time high of 7.45 million.
From the data, a notable increase in the number of beneficiaries was witnessed from mid-March when most states imposed strict measures to curb the spread of the virus. By the third week of last month, the figures stood at 1.78 million. A week later, the first significant spike was recorded at 3.05 million, a growth of 71.3% from the previous week, a number that later grew by 144.3% the following week to 7.45 million.
The first two weeks of the last month recorded 1.69 million and 1.7 million beneficiaries respectively, a figure relatively similar to the average of January and February numbers. Generally, the first two months of this year had an average beneficiary figure at 1.7 million. This year, the lowest number of beneficiaries was during the first week of February when the figure stood at 1.67 million.
The data refers to the continuing jobless claims, an actual number of unemployed people who are currently receiving unemployment benefits or have filed for unemployment benefits at least two weeks ago.
The increase in the number of unemployment beneficiaries translates with the period when the US Coronavirus cases hit the peak. Currently, the US is the most impacted country with over 600,000 cases and at least 26,000 deaths.
Unemployment surges in the wake of the economic shutdown
Consequently, both the state and the federal government have escalated measures like social-distancing to combat the coronavirus pandemic, shutting down schools and factories, and sending many workers home. Already leading corporations have either announced layoffs or furloughed workers, something contributed to the high number of unemployment beneficiaries. Basically, a big part of the US economy has been shut down.
The figures offer a glimpse of what the United States should expect in the coming days. A section of economists expects that the country to fall into a recession in the second quarter of 2020.
The data also looked at the number of Americans filing for unemployment benefits from the start of this year and the first week of April. Just like the number of beneficiaries, jobless Americans have increased significantly in the wake of the full impact of the Coronavirus.
The data indicates that between the first week of January and the second week of March the number averaged at 0.21 million. There was a slight increase in the third week of March to 0.28 million. The following week, there was a massive jump of 1078.57% to 3.3 million filings.
A week later, the number more than doubled to 6.86 million, representing a growth of 108%. By the first week of April, the number slightly dropped to 6.6 million. During this period, the government had announced various measures to cushion Americans against the full impact of the Coronavirus.
Initial unemployment claims have a big impact in financial markets because unlike continued claims data which measures the number of persons claiming unemployment benefits, initial jobless claims measure new and emerging jobless cases.
Who qualifies for unemployment benefits?
In the United States, unemployment benefits are made by authorized bodies to unemployed people. The benefits are funded by a compulsory government insurance system. Although the terms for receiving the benefits vary based on the state, the government has waived some restrictions in the wake of the pandemic.
The White House alongside Congress announced a $2 trillions coronavirus relief package to cushion businesses and individuals against the impact of the pandemic. With the package, American households will receive checks and rescue distressed businesses in a bid to beat unemployment.
With high unemployment numbers, it is not yet clear to understand the impact of the pandemic. It is largely expected that the number of unemployed Americans might keep increasing if the crisis is not contained soon.
The situation can only be reversed quickly depending on the strategy deployed by the government to safely reopen the economy. The most recent strategy to go back to normal was a $2.3 trillion stimulus package in loans for small and mid-size businesses and US cities and states.