Mississippi saw a 486% increase in unemployment benefits claims last week, following a nationwide trend as the coronavirus put the brakes on the economy.
Across the U.S., nearly 3.3 million people applied for jobless benefits, nearly five times the previous record set in 1982.
Filings for unemployment aid generally reflect the pace of layoffs, and layoffs are expected to accelerate as the U.S. economy sinks into a recession. Revenue has collapsed at restaurants, hotels, movie theaters, gyms and airlines. Auto sales are plummeting, and car makers have closed factories. Most such employers face loan payments and other fixed costs, so they’re cutting jobs to save money.
The number for insured unemployment during the week ending March 14 was 1,803,000, an increase of 101,000 from the previous week. This is the highest level for insured unemployment since April 14, 2018 when it was 1,824,000.
Last week in Mississippi, there were 6,723 initial unemployment claims; a week earlier, there were 1,147 filings, a 486% increase.
The Magnolia State’s neighbors saw much higher claims as well: Alabama (800%), Arkansas (846%), Louisiana (969%) and Tennessee (931%).
As job losses mount, some economists say the nation’s unemployment rate could approach 13% by May. By comparison, the highest jobless rate during the Great Recession, which ended in 2009, was 10%.
In Northeast Mississippi, the unemployment rate was highest in the aftermath of the recession. From April 2009 until January 2012, the region struggled with 34 months of double-digit unemployment rates.
There are fears that those double-digit numbers could return.
“What seemed impossible just two weeks ago is now reality,” said Nancy Vanden Houten, an economist at Oxford Economics, a consulting firm. “The US economy will experience the largest economic contraction on record with the most severe surge in unemployment ever.”
The economic deterioration has been swift. As recently as February, the unemployment rate was at a 50-year low of 3.5%. And the economy was growing steadily if modestly. Yet by the April-June quarter of the year, some economists think the economy will shrink at its steepest annual pace ever – a contraction that could reach 30%.
In its report Thursday, the Labor Department said 3.283 million people applied for unemployment benefits last week, up from 282,000 during the previous week. Yet many people who have lost jobs in recent weeks have been unable to file for unemployment aid because state websites and phone systems have been overwhelmed by a crush of applicants and have frozen up.
That logjam suggests that Thursday’s report actually understates the magnitude of job cuts last week. So does the fact that workers who are not on company payrolls – gig workers, freelancers, the self-employed – aren’t currently eligible for unemployment benefits even though in many cases they’re no longer able to earn money.
The Associated Press contributed to this report