Jobless claims across the United States are soaring as the coronavirus pandemic prompts widespread shutdowns of commerce and industry, and layoffs with it, but it’s going to get significantly worse.
Indeed, based on recent anecdotes from press reports as well as company announcements, Goldman Sachs economist David Choi said he sees initial claims for the week ending March 21 jumping to a seasonally adjusted 2.25 million.
In a research note published late on Thursday, Choi said that even the most conservative assumption would be claims reaching more than 1 million, which would top the record high of 695,000 set in 1982. He also estimated revenue declines in consumer-facing businesses including casino gambling, sports and entertainment, hotels, public transportation and restaurants dropping anywhere from 75% to 95%.
“Many U.S. states have reported unprecedented surges in jobless claims this week,” Choi wrote. “While it is possible that claims were front-loaded to start off the week - implying a slower pace of claims for the week as a whole - our sample is biased toward states with a larger increase in claims, even the most conservative assumptions suggest that initial jobless claims are likely to total over 1 million.”
The grim estimate comes as the Trump administration has asked states to hold back from releasing unemployment-claims figures prior to the publication of a national compilation of weekly U.S. jobless claims.
The Wall Street Journal reported that an email from Gay Gilbert, an administrator at the U.S. Labor Department, requested that states keep their jobless claims numbers embargoed until the national claims figures are released each Thursday.
The first sign of how the coronavirus outbreak is impacting employment was released on Thursday, with the report saying initial jobless claims surged 70,000 to 281,000, the highest level in more than two-and-a-half years.