Another 4.3 million workers are expected to have filed state unemployment claims last week, bringing the total number seeking benefits to over 26 million since states started shutting down in the second half of March to stop the spread of the coronavirus.
The number of jobs lost rose to 22.025 million over the prior four weeks, erasing nearly all of the 22.442 million jobs recovered since the Great Recession. During the financial crisis the number of jobs lost totaled 8.7 million. The estimate is according to economists polled by Dow Jones.
"The pace of losses is slowing, but the pain is compounding," said Diane Swonk, chief economist at Grant Thornton.
Economists are closely watching Thursday claims data, expected at 8:30 a.m. ET, because it is for the week ending April 18, the same week the government conducted its survey for the monthly employment. Claims in the previous week totaled 5.245 million, and it was the fourth week of claims filings in the multiple millions.
"It's a critical week because it gives us the best real-time picture of what the job losses will be in April, which will be the worst month of the recession and the worst month ever," Swonk said. Swonk said because of the government's methodology and the furloughed status of some workers, the total number of nonfarm payrolls lost in April is not likely to be as high as the claims, but it will still be shockingly high.
Economists also say the unemployment rate could be 15% or more in April. Claims data has provided insight into what happened as the economy closed down, first with restaurant workers, retail employees and other service workers. The layoffs then also hit manufacturing and now they are expected to have broadened out even further. The filings of claims are also expected to have been delayed because of the sheer volume of the sudden layoffs overburdening state unemployment processors.
So far, Michigan and Pennsylvania appeared to be hardest hit, with more than 20% of workers filing claims.
Rhea Thomas, Wilmington Trust economist said the weekly claims report should also confirm that the filings probably peaked, when they surged to 6.615 million in the week ended April 4.
"I still think it could be in the millions next week, but I think the trend could be declining," she said. "I still think some of the layoffs are still in the process of happening ... It does feel like we're going to have a couple of months of disruption."
Thomas said the government's Paycheck Protection Program for small businesses could encourage hiring as companies begin to get funds, and rehiring should pick in the next couple of weeks.