The figure below presents the seasonally adjusted initial claims for unemployment insurance in the U.S. beginning the first week of 2007 to the week ending March 14, 2020. As is evident, there was an abrupt increase in claims last week by 70,000 workers from the previous week. While the initial claims reported for the past week will be revised next week, this one-week increase is the second largest increase during the period depicted in the figure.
The press release for the Department of Labor noted that “A number of states specifically cited Covid-19 related layoffs, while many states reported increased layoffs in service related industries broadly and in accommodation and food industries specifically, as well as in the transportation and warehousing industry, whether COVID-19 was identified directly or not.”
As the country responds to Covid-19, unemployment insurance will certainly be relied upon by workers in industries that are the most affected. As the figure shows, initial claims have been in decline since the tail- end of the Great Recession. In coming weeks, we will find out the rate at which initial claims rise and the corresponding change in the unemployment rate.