About 5.2 million new Americans registered to receive unemployment benefits last week, while businesses and businesses remain closed, given the shutdown caused by the outbreak of the Coronavirus.
This brings the number of applications for unemployment benefits submitted to the US Department of Labor over the past four weeks to more than 20 million.
This number is roughly equivalent to the number of jobs that employers have added over the past decade.
This economic crisis comes at a time when the number of new cases of Coronavirus exceeds 629 thousand cases.
The high unemployment rates are a major setback for the largest economy in the world, where the unemployment rate was approximately 3.5 percent.
Economists now expect this rate to be 20 percent.
The number of 5.2 million new applications in the week ending April 11 has fallen from the 6.6 million in the previous week, but these numbers are still hitting previous records.
Many economists warn that these high numbers will continue, as Goldman Sachs researchers expect to submit about 37 million applications by the end of May.
“The left and right indices are being broken in terms of the depth and breadth of the current downturn,” said Mark Hameric, chief economist at bankrate.com.
“With no immediate end in sight to efforts to contain the spread and impact of the virus, it is impossible to see a near-term rise in employment prospects,” he says.
The electronics chain “Best Buy” said this week that it would give leave to more than 50,000 employees, while the ferry company “Royal Caribbean Cruises” announced that it would reduce or suspend about a quarter of its workforce in the United States.
This coincides with a record 8.7 percent drop in retail sales, while industrial production has fallen to a maximum of 74 years.
The United States has expanded its unemployment benefit program, making payments larger and more people, including freelancers, eligible to apply for it.
Thus, requests flowed to the offices concerned throughout the country, which became crowded with them.
Glenn Hooker, the co-owner of a now closed barbershop in Virginia, said that he applied for unemployment benefit, as a self-employed person, at least twice and was rejected, and when he called to find out why he could not reach anyone.
“The phone is ringing, it is ringing, it is ticking,” said Hooker, 49.
The owner of the restaurant, George Constantinou, dismissed most of his 130 employees last month, working in his four restaurants in New York and New Jersey, and kept a core group to continue cooking and delivering.
He said he expected the move would allow his business, which has seen a sales drop of nearly 80 percent in the first weeks, to keep money and workers to get at least some wages.
He added: “Honestly, I thought it would take two weeks, then things went from bad to worse and worse”.
Amid the delay in processing the claims, some employees sought his assistance in applying for food aid coupons.
And if the economic downturn persists, then re-employing everyone may have no meaning, even after he can fully restore his business.
He says: “It is at this stage, we have to follow up almost every day to show what is happening”.
US President Donald Trump is expected to issue “new guidelines” to reopen the economy in some areas of the country, where experts believe the infection rate of the Coronavirus is under control.
Trump said on Wednesday, “There must be a balance, and we have to go back to work”.