Unprecedented 'Unemployment Crisis' in US... Record High 6.65 Million Unemployment Benefit Claims

More Than Double Previous Peak of 3.3 Million Cases
Layoffs Surge Amid Consumer Sentiment Decline and Business Suspensions

U.S. President Donald Trump closed his eyes and briefly paused in thought during a COVID-19 task force briefing held at the White House on the 31st of last month (local time). President Trump stated at the briefing that the next two weeks would be a very difficult period regarding the spread of COVID-19.

The 'unemployment crisis' in the United States caused by the novel coronavirus disease (COVID-19) situation is intensifying.

The U.S. Department of Labor announced on the 2nd (local time) that the number of unemployment benefit claims for the fourth week of March (22-28) was 6.648 million.

This is about double the 3.307 million claims recorded in the previous third week (15-21), which was the highest ever.

Considering that before the COVID-19 situation fully developed, weekly unemployment claims were around 200,000, this can be interpreted as meaning that more than 10 million people have lost their jobs due to the COVID-19 crisis.

Before the COVID-19 situation, the highest number of claims was 695,000 in 1982 during the second oil shock. After the global financial crisis in 2009, claims rose to 650,000. The Department of Labor has been tracking unemployment claims since 1967.

The weekly unemployment claims are regarded as a barometer to gauge the extent of job losses caused by COVID-19.

The surge in unemployment claims appears to be the result of many U.S. states issuing 'stay-at-home orders,' effectively shutting down non-essential businesses.

Due to mandatory business closures and other measures to curb the spread of COVID-19, job losses accelerated from the third week of March, especially in leisure, hospitality, and retail sectors.

In states such as New York, New Jersey, Oregon, Kentucky, and Colorado, new unemployment claims increased by tens of times compared to the previous week, causing the computer systems to temporarily crash.

It is estimated that the impact is particularly significant among working-class people such as restaurant workers and store clerks. Those with limited means may face immediate threats to their livelihoods.

In the U.S., many people do not qualify for unemployment benefits unless they meet certain conditions, such as having worked in the state for more than six months.

Due to reduced consumer sentiment and production shutdowns, temporary layoffs of employees by U.S. companies are also rapidly increasing.

According to the Wall Street Journal (WSJ), U.S. clothing retailer Gap announced on the 30th of last month (local time) that it would indefinitely extend store closures and temporarily lay off most of its approximately 80,000 store employees in the U.S. and Canada, with some reductions.

U.S. department store chain Kohl's, which employs about 120,000 people, also decided to temporarily lay off store employees.

Earlier, Macy's, a U.S. department store chain with about 125,000 employees, also announced plans for temporary layoffs.

Other retailers such as Asena Retail Group and women's clothing company RWT Retailwinds have also implemented temporary layoffs.

WSJ explains that these moves by retailers are aimed at reducing labor costs as they are directly hit by COVID-19.