US jobless claims hit 6.6 million as virus spreads

The number of Americans seeking unemployment benefits has hit a record high for the second week in a row as the economic toll tied to the coronavirus intensifies.

More than 6.6 million people filed jobless claims in the week ended 28 March, the Department of Labor said.

That is nearly double the week earlier, which was also a new record.

The deepening economic crisis comes as the number of cases in the US soars to more than 216,000.

With the death toll rising to more than 5,000, the White House recently said it would retain restrictions on activity to try to curb the outbreak.

Analysts at Bank of America warned that the US could see “the deepest recession on record” amid forecasts that the unemployment rate could hit more than 15%.

The outlook is a stark reversal for the world’s biggest economy where the unemployment rate had been hovering around 3.5%.

However, more than 80% of Americans are now under some form of lockdown and the hit has been immediate and severe.

More than 3.3 million people filed claims two weeks ago, eclipsing the previous record of 695,000, set in 1982.

The most recent jobless claims figure was worse than many economists had feared.

“More than any other economic data point, the unprecedented and massive level of more than 6.6 million new jobless claims captures the recent, heartbreaking financial devastation related to the coronavirus outbreak and measures aimed at containing it,” said Mark Hamrick, senior economic analyst at Bankrate.com.

Workers in accommodation and food services were hit hard again this week, the Department of Labor said.

Though it said states are reporting “a wider impact across industries”.

“With this report there should be little doubt that … US is already in deep recession and the global economy will be too”, tweeted Mohamed A El-Erian, chief economic adviser to financial services firm Allianz.

Source: bbc.com