More Mainers filed for unemployment last week than in the record-setting previous week as the new coronavirus outbreak places the U.S. economy under immense stress at an unprecedented pace.
New unemployment insurance claims in Maine and nationally rose again last week as Gov. Janet Mills clamped down on activities at nonessential businesses and Portland and South Portland issued “stay-at-home” orders for residents. On Tuesday, the governor issued a stay-at-home order for the entire state that took effect Thursday morning.
Unemployed workers in the state submitted 23,761 new claims for the week from March 22 to 28, up from the previous week’s 21,459, according to Maine Department of Labor data released Thursday. In the week from March 8 to 14, before strict limits were placed on business activity, the claims were 634. Initial claims averaged 800 in the same week in 2018 and 2019.
Last week’s claims were more than quadruple the high of 5,634 new weekly claims set during the Great Recession in 2009. Continued claims increased to 45,700 from 30,200 the previous week.
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Nationally, the seasonally adjusted unemployment insurance claims hit a record of 6,648,000 for the week from March 16 to 28, more than double 3.3 million the week before, according to the U.S. Department of Labor.
This marks the highest level of seasonally adjusted initial claims in the history of the seasonally adjusted data. The department initially reported 3.28 million claims for last week but revised it up by 24,000 claims. In the week from March 8 to 14, the number of claims was 281,000.
Maine Labor Commissioner Laura Fortman said in a statement that the hardest hit industries are food services and lodging, health care and social assistance, retail trade, and manufacturing. She said the department paid $6 million in benefits last week to those who filed between March 15 and 21.
Many have reported issues contacting the department for help troubleshooting claims. Fortman said “staff are working tirelessly to process claims as quickly as possible.” She recommended that people file their claims online using a computer rather than a smartphone and do so in the evening when there is less internet traffic.
The rapid spike in claims over the past two weeks signaled an expected escalation of jobless claims in the weeks and months to come, according to economists.
In a report released last week, an economist at the Federal Reserve Bank of St. Louis predicted that 47 million people could lose their jobs in the second quarter of this year, from April through June. That translates into a 32.1 percent unemployment rate, or 8 times higher than the 3.5 percent to 3.6 percent of the past six months.
Goldman Sachs’ forecast is predicting the U.S. economy will contract 9 percent in the first quarter and 34 percent in the second quarter. But its unemployment rate estimate, while high at 15 percent, is half that of the St. Louis Fed’s.
More than 87,000 Maine jobs could be lost by the summer as the coronavirus drags the country into a recession, according to the Economic Policy Institute. That is more than four times the jobs lost in Maine during the recession between 2007 and 2009.
Estimates of job losses are changing rapidly as the virus spreads. The Economic Policy Institute estimated that the national economy could lose 19.8 million jobs by July. It said that while a $2.2 trillion federal stimulus package could offset some losses to workers, many may need to remain out of work for months to stop the spread of the virus.
Maine workforce officials said they are not sure how long businesses will need to remain closed or what the full economic effect on the state will be. To try to relieve financial pressure on workers, the Maine Department of Labor has waived the normal one-week waiting period before workers can file for unemployment.
Before the virus began spreading worldwide in December, Maine’s unemployment rate had been on a record pace of being below 4 percent for 50 consecutive months in February, at 3.2 percent adjusted seasonally.