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Michigan's jobless claims soar 1,500% as 55,000 seek benefits

Craig Mauger
The Detroit News

Lansing — The number of Michigan residents filing for unemployment on Monday, Tuesday and Wednesday jumped by 1,500% over what would normally be expected as businesses shuttered to prevent the spread of the coronavirus.

More than 55,000 sought unemployment benefits from Monday through Wednesday, said Erica Quealy, spokeswoman for the Michigan Department of Labor and Economic Opportunity.

People wait in line to enter the unemployment office at New Center One in Detroit, Wednesday, March,18, 2020,

University of Michigan economists released a revised forecast for the state based on the coronavirus outbreak and projected the unemployment rate could rise from the current 3.8% to 5.8% by the end of this year if emergency measures prove effective in stunting the spread of the virus. The rate would fall to 4.5% in 2021 under this scenario.

But if the outbreak is prolonged, the economists estimate the jobless rate could hit a peak of 10% in the third quarter of this year before dipping to 8.1% by year's end and 8.8% in 2021.

The latest jobless claim numbers aren't surprising because of the economic uncertainty the public health crisis has created, said Rich Studley, president and CEO of the Michigan Chamber of Commerce.

The coronavirus outbreak is affecting different businesses in the same region in varying ways, and it's even affecting businesses in the same industry differently, he said.

"While we're in the middle of this storm, it will end," Studley said. "We will get through this together."

However, some of those in Michigan without work say the state's jobless numbers may underestimate what's happening because they haven't been able to reach the Unemployment Insurance Agency about their claims.

David Day of Oak Park worked for Delaware North, a hospitality and food service management, in suites at Little Caesars Arena and Comerica Park in Detroit. With large events canceled, he's been out of work for about two weeks, he said.

When he tried to file his unemployment claim online, there was an issue, Day said. He has spent hours on the phone unsuccessfully trying to reach a state employee to resolve it, he said.

"When I don’t have any money coming in, it’s just kinda terrifying for me," said Day, who had recently become a first-time home owner.

The state's unemployment website acknowledges that users may experience "some slowness" because of a "high volume" of traffic.

Some businesses, such as those in hospitality, have felt direct repercussions of the efforts to stem the spread of COVID-19. Through a Monday executive order, Gov. Gretchen Whitmer closed bars, movie theaters, workout facilities and dine-in service at restaurants.

But she's also expanded access to unemployment benefits, allowing those to file who are out of work because they're caring for family members and those who are sick or quarantined without paid medical leave to apply.

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.

cmauger@detroitnews.com

Bloomberg News contributed