Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

By summer, millions will likely be laid off, or not hired when they otherwise would have been. (Photo: Shutterstock)

By summer, millions will likely be laid off, or not hired when they otherwise would have been. (Photo: Shutterstock)

Increase in Unemployment Insurance Claims Is a Preview of the Coming Recession

Large fiscal stimulus is needed.

Initial unemployment insurance (UI) claims for the week ending last Saturday, March 14th showed an increase in initial UI claims of 70,000 from the prior week—from 211,000 to 281,000. This was the first official labor market data release to show the early signs of the coronavirus shock. Prior to this week, unemployment insurance claims had been hovering between roughly 210,000 and 230,000 for more than two years. The jump last week was the biggest one-week increase since 2012 (and with an increase of 33%, it was the biggest increase in percent terms since 1992—bigger than anything we saw during the Great Recession). For comparison, the increase of 70,000 last week was slightly more than the increase of 61,000 due to Hurricane Harvey in the week ending September 2, 2017.

But today’s hurricane-sized increase is nothing compared to what we can expect in coming weeks. Today’s numbers capture unemployment insurance claims from last week. While media reports show layoffs began accelerating last week, if a worker was laid off last week and waited to apply for benefits until this week, they are not in these data. Further, while coronavirus layoffs began in earnest last week, the full weight of this economic shock is still ramping up as businesses realize what they are up against.

This means that these numbers are just the leading edge of the labor market impact of the coronavirus shock. Policymakers must not take comfort in the fact that they weren’t more extreme. By summer, millions will likely be laid off, or not hired when they otherwise would have been. The coronavirus relief package signed into law last night was an important first step in fighting this crisis. Policymakers should quickly pass a big fiscal stimulus package. This “phase three” package should finance a sizable amount of household consumption (including through a major expansion of unemployment insurance), give fiscal aid to state governments, provide a payroll tax credit to businesses to not lay off workers, ramp up direct government purchases of things like medical equipment to help fight the virus, and make sure the duration of all measures to address the coronavirus economic shock are determined by economic conditions, not arbitrary timelines. Policymakers must act quickly to help limit the number of U.S. workers and their families who suffer the economic catastrophe of being laid off during a recession, and to ease the burden of those who do.

© 2021 Economic Policy Institute

Heidi Shierholz

Heidi Shierholz leads the Economic Policy Institutes’ Perkins Project on Worker Rights and Wages, a policy response team that tracks the Trump administration’s wage and employment policies. She also heads EPI’s efforts to advance a worker-centered policy agenda.

... We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

Human Rights Defenders Warn Biden Border Policy 'Quickly Transforming Into Trump 2.0'

Like his predecessor, President Joe Biden now being accused of "using racist, xenophobic tropes about immigrants to weaponize Covid-19 against migrants and asylum-seekers."

Jon Queally ·

'Bombshell': Israeli Spyware Used to Hack iPhones of US State Department Officials

Calling the Israel-based spyware maker NSO Group an "in-plain-sight national security threat," one expert warned that "a multi-agency investigation is immediately needed."

Jessica Corbett ·

US Progressive Caucus Hails Honduran Election as Chance for 'New Chapter' in Relations

"We encourage the Biden administration to use this opportunity to make a clean break with previous presidential administrations, which worked to ensure that the 2009 coup d'état succeeded."

Brett Wilkins ·

'The Facts of This Case Are So Egregious': Parents of Michigan School Shooter Charged in Killings

"There were a lot of things that could have been so simple to prevent," the Oakland County prosecutor said of the mother and father now being sought by law enforcement.

Kenny Stancil ·

Health Minister Says 'Highly Transmissible' Omicron Hitting Young Children Hard in South Africa

In South Africa's worst-affected province, children under the age of five now make up the second-largest group being admitted to hospitals.

Julia Conley ·

Support our work.

We are independent, non-profit, advertising-free and 100% reader supported.

Subscribe to our newsletter.

Quality journalism. Progressive values.
Direct to your inbox.

Subscribe to our Newsletter.

Common Dreams, Inc. Founded 1997. Registered 501(c3) Non-Profit | Privacy Policy
Common Dreams Logo