US Joblessness Set To Spike As Virus Takes Toll On Businesses

Washington, (UrduPoint / Pakistan Point News - 26th Mar, 2020 ) :With streets in major cities barren, and shops and restaurants forced to close due to the coronavirus pandemic, economists warn of a record explosion of Americans filing for unemployment benefits.

The Labor Department on Thursday will release its weekly data on first-time applications for jobless benefits covering the week ending March 21 -- the first to show the epidemic's impact on the US economy.

"Whatever the number, it will be horrific," said Ian Shepherdson of Pantheon Macroeconomics.

The data have been mundane for the past two years amid a very strong US labor market, but the situation has changed for this lowly report on the frontlines of the virus fallout.

Last week's report showed jobless claims surged to their highest level since September 2017, especially with a jump in applications from hotel and restaurant workers.

But that was just the tip of the iceberg.

"The consensus for today's first post-apocalypse jobless claims number (1.

5 million), looks much too low," Shepherdson said, adding that he is expecting a staggering 3.5 million.

White House economic adviser Larry Kudlow acknowledged the report would show a jump, but said the market is expecting it.

"It's going to be a very large increase," he said on Fox business Network.

But economists cautioned that forecasting data in unprecedented times is dicey at best.

The models "are based on prior experience and we have no prior experience of an economy that has largely been shut down," said Rubeela Farooqi of High Frequency Economics.

"These are extraordinary times that will result in extraordinary outcomes."Reports from states and even data on Google searches show that unemployment offices have been overwhelmed in recent days and may have to estimate their totals.

Shepherdson noted that New York alone reported receiving 1.7 million calls last week, "though it's not clear if all of these calls led to a formal claim."