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5.25 million more Americans seek unemployment aid; Trump unveils guidelines for reopening country

In Massachusetts, claims total 103,000 in week ended April 11

Some 500,000 people have lost their jobs in Illinois in the past month.
Some 500,000 people have lost their jobs in Illinois in the past month.Nam Y. Huh/Associated Press

In the latest tally of the economic pain caused by the coronavirus pandemic, 5.25 million Americans filed new claims for unemployment pay last week, bringing the total for the past month to a record 22 million, the Labor Department said Thursday.

In Massachusetts, first-time jobless claims were almost 103,000 for the week ended April 11, data from the Baker administration showed. Over the past month, more than 570,000 people have sought benefits from the state, representing 15 percent of employer payrolls at the start of March, a level consistent with the country overall.

Both the state and national numbers marked a second-straight weekly decline, but the filings remain at historic levels. Before the pandemic hit, US jobless claims this year were running at 246,000 a week. In just one month, layoffs have eliminated more jobs nationally than were created during the national expansion that began in June 2009.

Moreover, many states, including Massachusetts, aren’t yet accepting jobless claims from newly eligible recipients such as self-employed and gig workers. Filings may spike when more states finish updating their computer systems to process these benefit applications.

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“It is a stark reminder that the economic damage from COVID-19 just keeps coming,” said Andrew Stettner, a senior fellow at the Century Foundation who studies unemployment issues.

Government reports released Wednesday also underscored the shutdown’s profound impact on the economy. The Commerce Department said that retail sales fell 8.7 percent in March from the previous month, the biggest decline in data going back to 1992. Industrial production dropped 5.4 percent, the largest monthly decline since 1946, the Federal Reserve said.

The country is in the early stages of a recession that will be more severe than any downturn since the 1930s. Gross domestic product will decline by 5.4 percent in 2020, forecasters at IHS Markit said Thursday.

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“We do not expect real GDP growth to turn positive until the fourth quarter of this year,” wrote IHS chief economist Nariman Behravesh and Sara Johnson, the firm’s executive director of global economics. They projected 6.3 percent GDP growth next year.

With estimates of the US jobless rate at 20 percent or more, President Trump briefed governors Thursday on guidelines for reopening the country. The process may be a long one, with federal officials warning that some social-distancing measures may need to remain in place through the end of the year to prevent a new outbreak, the Associated Press reported.

Governor Charlie Baker is working with his counterparts in other Northeastern states, including Rhode Island, Connecticut, and New York, to coordinate plans for gradually easing social-distancing restrictions and allowing businesses to reopen. On Thursday, New York Governor Andrew Cuomo extended orders closing nonessential businesses and curbing public gatherings until at least May 15, though the rate of new COVID-19 cases has slowed. Massachusetts’ restriction are set to expire May 4.

Public health experts warn that any effort to send people back to work will be hampered by a lack of resources to screen for COVID-19 and trace the social contacts of those who test positive. Close monitoring is needed to prevent further outbreaks of the infection, the experts say.

The Labor Department said that nearly 12 million people were receiving jobless payments last week, a record that far exceeds the peak during the 2007-2009 recession.

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Last week, the state Department of Unemployment Assistance issued checks to nearly 315,000 people. Of the 570,000 people seeking payment in the past month, the food and accommodation industry accounted for 17.5 percent of the claims, followed by retail, at 12.4 percent.

The state’s unemployment rate is about 17 percent, according to an estimate by Alan Clayton-Matthews, an economist at Northeastern University, up from 2.8 percent in February.

“If gig and self-employed workers had been filing and counted in the initial claims, then I would expect the unemployment rate to plateau at about 20 percent,” he said.

Still, some laid-off workers are finding new jobs.

Mike Baker, 34, lost his job as director of marketing when the travel app company Lola.com cut its workforce by 30 percent in March.

“I quickly started reaching out and getting reached out to about a next job,” the East Boston resident said. “Over a couple weeks I narrowed it down to the ones I was most interested in, and this week I just signed with one of those companies.”

Baker’s new employer is Formlabs, a maker of 3-D printers in Somerville.

The $2 trillion rescue package Congress passed last month includes a boost to unemployment benefits. The bill gives laid-off employees $600 a week on top of their state benefits for four months. It would also extend benefits for 13 weeks beyond state limits. Massachusetts expects to start accepting filings from gig workers and other newly eligible recipients by the end of the month.

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Congress also authorized nearly $350 billion for loans to small businesses, with the debt forgiven in amounts depending on how many workers are retained or rehired. The money has run out, and thousands of small-business owners whose loans have not yet been processed must now wait to see if Congress and the White House can reach a compromise to add $250 billion to the program.

Despite complaints about its problem-plagued rollout, the Payroll Protection Program may help limit layoffs.

Michael Vitale, president of Puritan Fish Co. in South Boston, said he has kept on his 23 employees, despite a 40 percent drop in business, on the hope that his request for a PPP loan will be approved.

“We are currently not profitable but my employees are like family to me, so I don’t want to lay them off,” said Vitale, whose family started the fish-processing business in 1958. “I am hoping that the Payroll Protection funds will allow us to bridge the gap for a few months.”

Correction: An earlier version of this story incorrectly stated that Puritan Fish received a government loan. At time of publication, the company’s loan application had been approved by its bank but had not been processed by the Small Business Administration. Subsequently, the SBA said the program was out of funds.

Globe correspondent Anissa Gardizy contributed to this report.


Larry Edelman can be reached at larry.edelman@globe.com. Follow him on Twitter @GlobeNewsEd.