COVID-19 Causes Unprecedented Job Crisis

New U.S. labor market data released on Thursday revealed yet another massive increase in jobless claims for the week ended May 2. From April 26 to May 2, 3.17 million Americans newly applied for unemployment benefits, bringing the total for the last seven weeks to a whopping 33,483,000. While the latest reading marks a 677,000 decline from the previous week's revised level and 3.7 million drop from the crisis' worst week, it's hard to speak of an improvement given the severity of the situation. In historic context, the latest numbers are still off the charts, illustrating the devastating effect the coronavirus has had on the U.S. economy. According to the U.S. Department of Labor (DOL), previous peaks had occurred in the fall of 1982 and in March 2009, when initial claims had reached 695,000 and 665,000, respectively.

The rapid (albeit expected) rise in unemployment was driven by the measures taken to contain the COVID-19 epidemic in the United States, which have led to widespread closures of bars, restaurants and movie theaters as well as halting most travel, shocking the transport and hospitality industries to the core. “As states begin the process of reopening and Americans return to work, today’s unemployment report reflects once again the hardship caused by the coronavirus pandemic," Secretary of Labor Eugene Scalia said in his official statement on last week's report, adding that "all 50 states are now delivering the $600 additional weekly unemployment benefit provided by the CARES Act."