The Labor Department revealed that a record 6.6 million Americans applied for unemployment last week. Over 3.3 million applied the previous week.

In two weeks in March, almost 10 million filed for unemployment benefits.

The Wuhan coronavirus has led to many businesses shutting down in effort to slow the spread of the virus.

From The Wall Street Journal:

There are several reasons why unemployment claims are likely to remain high in the coming weeks. For one, many states haven’t fully processed all unemployment-benefit applications due to the deluge. Further, the federal rescue package signed into law last week increases the pool of workers who can tap benefits by making independent contractors and self-employed individuals eligible.

Joe Brusuelas, chief economist at RSM US LLP, said the unemployment rate rises by 1 percentage point for every 1.5 million initial jobless claims. That means two weeks of claims near 3 million could lead to a jobless rate of 7.5%.

Layoffs have been particularly widespread among small businesses. Such firms operate on lower cash reserves and quickly resorted to layoffs, according to researchers at the University of North Carolina’s Kenan-Flagler Business School. They estimated that up to 6.6 million small-business employees were immediately laid off when state governments in March began mandating businesses close to contain the virus’s spread.

 

 
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