U.S. Unemployment Claims Jump to 3.28 Million

(Bloomberg) – The magnitude of the economic devastation being wrought by the coronavirus pandemic was laid bare on Thursday when the U.S. government reported an unprecedented surge in the number of people seeking jobless benefits.

A total of 3.28 million people filed for unemployment insurance in the week ended March 21, dwarfing previous highs in Labor Department reports published since 1967. Two weeks earlier, before closures of businesses swept across vast swaths of the country, the number stood at 211,000, close to a half-century low.

“This shows the severity of the downturn, and the speed of it,” said Michelle Meyer, head of U.S. economics at Bank of America Corp. “It speaks to the unusual nature of this recession — it is an abrupt plunge into recession versus prior downturns, where the shock has time to multiply. We could have very high numbers continue for the next few weeks.”

Economists’ projections for the figure ranged as high as 4.4 million. Before adjusting for seasonal fluctuations, initial filings were at just under 3 million.

Even with the surge, the S&P 500 extended its advance, heading for its first three-day rally since February, as investors speculated the $2 trillion rescue package passed by the Senate will lessen the pandemic’s toll on the economy.

Claims increased in all 50 states and the District of Columbia, with nine states reporting jumps of at least 100,000 from the prior week.