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US unemployment could hit 25 MILLION as coronavirus wrecks economy

US unemployment could hit 25 MILLION as coronavirus wrecks economy
With the US Labor Department set to reveal the number of weekly jobless claims on Thursday, economists believe another 5.4 million Americans will file for unemployment benefits, bringing the number to over 22 million in a month.

In the week ending April 4, more than six million claims were filed, which was a slight decrease from the previous week’s record-breaking 6.867 million.

The ongoing surge in filings for unemployment insurance has been aggravated by the expansion of those who were allowed to file claims. The CARES Act has expanded the group to include the self-employed and independent contractors. Most of the job losses came from restaurants and drinking establishments, while healthcare and social assistance have been also hurt. 

“While we believe the magnitude of increases in claims has moved passed the peak, the cumulative number is still rising, likely reaching the range of 25 million over the next few weeks,” Morgan Stanley economist Jan Kozak said in a note seen by Yahoo Finance.

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Some economists forecast the number of claims to steadily begin falling from previous highs in the coming weeks.

According to Nomura economist Lewis Alexander, "there is some evidence that states that implemented lockdowns earlier are seeing their claims numbers ease (Pennsylvania, California, New York). However, this is being offset by increased claims in states with more recent lockdowns (Virginia, Georgia)."

“As we move further away from the date of initial lockdowns, claims should begin to normalize somewhat further,” he said.

There have been more than two million confirmed coronavirus cases and over 138,000 deaths worldwide to date. In the worst-hit nation, the United States, more than 639,000 people have been infected and over 30,000 deaths have been reported.

President Donald Trump said on Wednesday that the spread of the coronavirus in the US has “passed the peak.”

For more stories on economy & finance visit RT's business section

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