Initial claims for unemployment insurance totaled 2.98 million for the week ending May 9, marking the eighth consecutive week of massive numbers of layoffs (see chart). However, claims have slowed for the sixth straight week after registering 6.87 million for the week ending March 28.
The current 8-week total of 36.47 million initial claims is more than four times the total 8.7 million job losses that occurred over 25 months versus during the Great Recession (see chart). The current total is also more than double the 15.4 million peak number of unemployed people for the Great Recession, as measured in the household survey portion of the monthly Employment Situation report (see chart).
The national Employment Situation report for April was released on Friday, May 8 and showed a drop of 20.5 million in nonfarm jobs while the unemployment rate surged to 14.7 percent; total unemployed in April was 23.1 million. The previous cycle peak in the unemployment rate was 10 percent in October 2009 while the highest unemployment rate since 1950 came in November 1982 at 10.7 percent. Though data collection was much less reliable, the unemployment rate following the Great Depression was estimated to have peaked at 25 percent in 1933.
Massive layoffs over the last eight weeks has crushed the labor market, consumer confidence and retail spending. The unprecedented flood in claims is part of a tsunami of negative economic statistics that reflects the impact of the COVID-19 outbreak and the drastic policy reactions implemented to contain the spread. Despite massive government spending and extraordinary monetary policy efforts, the economy likely entered a recession in March, ending the longest economic expansion in U.S. history. Expect extraordinarily weak economic reports over the next several months.