Unemployment Claims Soar to 3.3M – Highest Ever

Americans made a record-setting 3.3 million unemployment benefit claims last week, nearly five times the old record set in 1982. These huge increases come as hundreds of thousands of businesses are closing or laying off staff in the midst of the coronavirus crisis.

Economists argue this crisis is similar to the entire country facing a natural disaster at the same time. Localized unemployment numbers in a specific city can be similar to this level after a hurricane or an earthquake, but coronavirus has extended those economic conditions nationwide. In addition, the crisis affects nearly every industry as demand sags and businesses are forced to close due to laws against gatherings of more than a certain number of people.

Part of the issue has been the speed of the crisis. within just a few weeks coronavirus went from one of many daily news stories to a nationwide crisis as publicly visible industries like major sports leagues shut down within a few days, and more states began to take lockdown measures after that. The rapid pace of the crisis and closures has left businesses and workers unable to prepare for the crisis and caused many sudden layoffs.

States are scrambling to add enough capacity to handle all these claims, as computer systems are not equipped to handle this amount of volume. States are adding server capacity and hiring workers to process the historic number of claims, and it is possible there are further shocks coming as these initial closures force other businesses to close due to sagging demand.