Record spike in jobless claims may mean Congress has to pass even more stimulus, economists say

Key Points
  • Nearly 10 million Americans filed for unemployment benefits in just two weeks, the Labor Department said Thursday.
  • Economists say more stimulus will be needed to counter the surge in unemployment from the coronavirus pandemic.
  • Some lawmakers have already called for another coronavirus relief bill, in addition to the record $2 trillion stimulus package passed last week.
People gather at the entrance for the New York State Department of Labor offices in Brooklyn on March 20, 2020. The Federal Reserve estimates that 47 million people could lose their jobs before the COVID-19 crisis ends.
Andrew Kelly | REUTERS

Last week, Congress passed a record $2 trillion package to combat the economic impact of the coronavirus pandemic. Now, many say it won't be enough with nearly 10 million Americans out of work in just two weeks.

Economists called on lawmakers to pass additional economic stimulus measures to fight the pandemic as new data Thursday showed a record spike in Americans filing for unemployment claims.

 "Given the incredible deterioration of the labor market in a matter of weeks, federal policymakers will absolutely need to come back and provide more desperately needed relief, and more support for the recovery once the lockdown is over," said Heidi Shierholz, senior economist at the Economic Policy Institute.

The CARES Act, which was signed into law by President Donald Trump on Friday, includes $250 billion to expand unemployment insurance benefits. Labor Department data released Thursday showed an unprecedented 6.6 million American filed for unemployment insurance last week, doubling the record from the week before.

"We have consistently argued from the beginning that the $2T CARES Act is nothing like big enough; these data, and the numbers which will follow, make another huge package inevitable," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

The coronavirus pandemic has brought a period of record low unemployment in the U.S. to a screeching halt as businesses have shut down. Some economists expect the unemployment rate, which stood at 3.5% in February, could quadruple over the next few months as industries like retail, travel and restaurants lay off workers. 

Gregory Daco, chief U.S. economist at Oxford Economics, said the unemployment rate could reach 12% as more than 20 million Americans lose their jobs from the pandemic.

"It does favor the passage of further stimulus given the likely high demand for unemployment benefits and the severe strains on state and local municipalities," he said in an email.

Some lawmakers have already called for another coronavirus relief bill, though there is little agreement over what provisions it would include. The White House told CNBC on Wednesday that it was not currently planning for another bill.  

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