22 million unemployed, wiping out a decade of U.S. job gains

Last week, 5.2 million people filed unemployment insurance claims in the week ending April 11, the Labor Department reported Thursday, making it among one of the bigger spikes, although smaller than the 6.6 million people who applied the week before and the record 6.9 million people who applied the week ending March 28.

The United States has not seen this level of job loss since the Great Depression, and the government is struggling to respond fast enough to the deadly coronavirus health crisis and the economic crisis triggered by shutting down so many businesses.

The eye-popping job losses in the past month have erased virtually all of the 22.8 million jobs gained from February 2010 to February 2020 during the rebound from the Great Recession.

A growing number of economists warn that recovering from the "Great Lockdown" is going to take a long time, and millions of Americans are likely to remain out of a job through the end of the year. Even after parts of the economy reopen, people will remain fearful of venturing out again to restaurants or offices unless there is widespread testing or a vaccine, many experts say.

In addition to health concerns, Americans typically slash their spending when they see widespread job losses and pay cuts among their friends and family members, another issue likely to prevent a rapid recovery.

The U.S. unemployment rate is already over 20%, according to two professors who are tracking the data in real time. It is expected remain close to 10% through the end of the year, meaning one in 10 people would still be out of work at the holidays, the National Association for Business Economics says.

"We are going to go through a couple of quarters, at least, where things will be bad," said Patrick Harker, president of the Federal Reserve Bank of Philadelphia. "I could see a [jobless] number hovering around or slightly below 20%, even."

Every state and nearly every industry has experienced job losses because of the nationwide lockdown. Several key swing states for the upcoming presidential election are among those hit hardest as layoffs in manufacturing and hospitality mount. In Michigan, 21% of workers have applied for unemployment in the past month.

Pennsylvania and Nevada and Ohio have close to 20% of workers out of a job, and Ohio is near 15%. The worst state of all is Hawaii with nearly 22% out of work since the tourism industry has been devastated.

"Households are spooked by the idea that they might lose their jobs again or have their hours cut again. They see so many different ways their lives can get disrupted," said economist Ernie Tedeschi of Evercore ISI, a research firm. "They are not going to be confident that things are back to normal until well after the virus has passed."

Tedeschi, a former Treasury Department official, said the psychological scars of so many job losses are likely to be long-lasting. He pointed to how millennials have been reluctant to buy homes, years after the Great Recession, because they are still spooked by seeing so many family and friends experience foreclosure or personal bankruptcy.

Government aid has been slow to arrive as state unemployment offices struggle to process the deluge of cases, and about half of the federal government's "stimulus checks" have yet to go out because the Internal Revenue Service lacks people's latest bank account information.

The 22 million jobless figure is likely an understatement since most gig workers and temporary employees have not been able to apply for aid yet.

"Once one adds in those not captured by the data, we are almost certainly facing a 20 percent unemployment rate now," said Joseph Brusuelas, chief economist at audit firm RSM. "At this point in the pandemic, roughly one in every seven individuals in the workforce is unemployed."

Only 19 states are accepting applications from gig workers and others who normally don't qualify for traditional aid but are supposed to get the $600 a week pandemic unemployment that Congress approved in March, according to Employ America which is tracking the state unemployment office problems closely. The remaining states won't accept applications until later this month or in May.

Amanda Fleming lives in Virginia, which is not accepting unemployment applications yet from self-employed workers.

Fleming and her husband run a tree-cutting business. They have not been able even to apply for unemployment. Their Small Business Administration loan has not come through, and they were one of millions of Americans who found out this week that their stimulus check is delayed.

"Just any help soon would be nice. My son's prescriptions are coming up soon for renewal," said Fleming, who lives in Clintwood. "I know it's not anybody's fault, but it's just a mess."

The Fleming family told their landlord they would pay the other half of the rent this week after their stimulus check came through, but now they don't know when the money will arrive. Fleming borrowed money from family to buy groceries this week. She spoke to The Washington Post on her way home from the grocery store.

Their doesn't have direct employees, but several people in the area work with them as independent contractors. Some have called Fleming asking for money because they are also in need and have yet to receive the government's financial help.

"We don't know how long this is going to last," Fleming said. "Our contract workers are looking at us right now, too. What should we do? I've even had some of them ask for money because they are in the same situation."