Millions of jobless Americans to apply for unemployment benefits for second straight week

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Bloomberg News/Landov

Millions of Americans are applying for unemployment benefits as the coronavirus shuts down large parts of the economy.

If the 3.3 million spike in jobless claims in mid-March wasn’t shocking enough, the number of Americans who applied for unemployment benefits last week is likely to soar even higher. Perhaps much higher.

Some 4 million people who’ve been laid off or furloughed may have successfully applied for unemployment benefits in the seven-day period from March 22 to March 28, according to economists surveyed by MarketWatch. Estimates range from a low of 1 million to a high of 5.25 million.

A few forecasters suspect new claims could surge significantly higher. Chief economist Diane Swonk of Grant Thornton said she wouldn’t be shocked if they shot up to 10 million.

What’s more, the 3.3 million figure from the prior week could be revised upward. Anecdotal reports suggest hundreds of thousands of newly unemployed Americans were unable to file applications in states where computer systems were overwhelmed by the crush of new claims.

New York, New Jersey and California were among the states that suffered such glitches. Although the governor of California has said new jobless claims leaped by 1.3 million since March 13, fewer than 200,000 showed up in the Labor Department’s last weekly tally.

Millions of people have been laid off or furloughed in the past few weeks as most states have ordered all but essential businesses to close. Hardest hit are businesses that largely cater to consumers and deal with people face to face: airports, hotels, eat-in restaurants, retailers, hair salons, yoga studios, gyms and the like.

Before the coronavirus crisis, jobless claims had never risen more than 695,000 in one week. Before long the total number of unemployed is likely to top the prior record of 15.3 million during the 2007-’09 Great Recession.

The federal government has stepped in to cushion the blow with more generous unemployment benefits and looser rules on who can receive them, making many more Americans eligible. A new study by RBC suggests that up to 70% of those who lose their jobs could actually receive more money from unemployment insurance than they would have gotten had they still been working.

Read: Big increase in jobless benefits to give millions of laid-off workers higher pay

The extra federal benefits add $600 to the maximum amount of money each state provides for the unemployed for up to four months. Some people could earn as much as $1,200 a week under the emergency federal program.

The federal government and states are rushing to make the extra money available, but it could take a week or two before applicants get the cash.

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