Unemployment Insurance claims near record high as 6.6 million filed last week
Unemployed line up for miles at food banks and millions skip paying rent
San José, CA – For the second week in a row, the U.S. Department of Labor reported April 9 that more than 6 million people applied for unemployment insurance in the previous week. The Labor Department also revised up last week’s claim numbers to 6.6 million, meaning that a total of 16.8 million people have lost their jobs and applied for UI benefits in just the last three weeks. The actual number could be higher as many states’ websites, phone lines and paper application sites were swamped.
The number of newly unemployed is about 10.3% of the labor force. Adding these numbers to the official unemployment rate of 4.4% based on surveys in the first part of March, the unemployment rate was 14.7% as of last week. This number does not include all those who were not able to file or who were still being laid off this week. This means that the unemployment rate as of last Saturday was almost 15%, the highest since records began in 1948. It is likely to be the highest unemployment rate since 1939, when the U.S. economy began to pull out of the Great Depression.
While at least two states, New York and Illinois, said that they were processing the additional $600 a week from the recent federal government relief law, many states have not started, leaving millions without the additional benefits that have been promised. Some states have said that these additional benefits may not be available for up to five weeks. Other states, such have Utah, were not taking applications from people who were self-employed, although the recent federal relief law also covers them. And the $1200 per adult payments are not coming until at least next week.
With unemployment benefits only covering about 55% of a worker’s income on average, and others still waiting for their claim to process or unable to even apply, demand for food banks has gone up as much as ten-fold. Lines of cars, literally miles long, have been reported at food distribution sites, including one just across from President Trump’s Mar-a-Lago resort. Food banks also face fewer donations as many restaurants which donated leftover food are closed and grocery stores are selling out.
According to NMHC, a group of apartment owners, about 13% fewer tenants paid their rents on time at the beginning of April as compared to a year ago. While some cities have banned evictions for the time being, landlords are expecting to be paid in full by their unemployed tenants. This means millions of families that are struggling to survive without a paycheck also have the threat of homelessness hanging over their heads in the midst of a pandemic.
But for the third week in a row, Wall Street rallied in the face of economic calamity for millions of workers and self-employed. The broadest major stock market index, the S&P 500, rose by almost one and a half percent on news that the Federal Reserve was expanding their lending again by more than $2 trillion to support the investors who bought corporate and municipal bonds (bonds issued by state and local governments).