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US jobless claims could exceed 2 million, Goldman says

Jeff Kearns
Bloomberg

Filings for U.S. unemployment benefits are poised to surge to a record 2.25 million this week, according to a Goldman Sachs Group Inc. analysis of preliminary reports across 30 states.

With businesses shutting down because of coronavirus-containment efforts, jobless claims are already climbing – by 70,000 to 281,000 for the week through last Saturday, Labor Department data showed Thursday. That was the biggest increase since Hurricane Sandy in 2012. The level Goldman projects for the week through March 21 is more than triple the prior peak of 695,000, in 1982.

“Many U.S. states have reported unprecedented surges in jobless claims this week,” economist David Choi wrote in a note late Thursday. “While it is possible that claims were front-loaded to start off the week – implying a slower pace of claims for the week as a whole – or that our sample is biased toward states with a larger increase in claims, even the most conservative assumptions suggest that initial jobless claims are likely to total over 1 million.”

Elsewhere on Friday, Bank of America Corp. saw even greater carnage across the American labor market, projecting that the next week’s release could show a spike to 3 million. “It is due to get very bad in April,” economists led by Michelle Meyer wrote. “We expect that the jobs report will show job loss of 1 million in the month.”

In Ohio, the Department of Job and Family Services said Friday that filings rose to 139,468 in the Sunday-to-Thursday period from 4,815 a week earlier.

California Governor Gavin Newsom said Wednesday that the most populous state, which typically sees about 2,000 claims daily, fielded 190,000 over a three-day period, according to a Sacramento Bee report that Choi cited. That would follow a surge in claims of more than a third, to over 58,000 on an unadjusted basis, according to Labor data released Thursday.

Newsom on Thursday issued a statewide order to stay at home, following such moves by the state’s municipal leaders.

Separately, the New York Times reported Thursday that the Trump administration is asking state labor officials to hold off on releasing precise figures for unemployment filings until the federal government issues national totals.

The Labor Department’s Office of Unemployment Insurance emailed state officials to ask that they only “provide information using generalities to describe claims levels (very high, large increase)” until the federal government releases the national claims total next Thursday, the Times reported.