Applications for unemployment benefits surge by 70,000 last week amid coronavirus layoffs

WASHINGTON (AP) — The number of Americans filing new claims for unemployment benefits surged last week by 70,000, indicating that the impact of the coronavirus was starting to be felt in rising layoffs in the job market.

Unionized hospitality workers wait in line in a basement garage to apply for unemployment benefits at the Hospitality Training Academy Friday, March 13, 2020, in Los Angeles. (Source: AP Photo/Marcio Jose Sanchez)

The Labor Department reported Thursday that applications for benefits, a good proxy for layoffs, rose by 70,000 to a seasonally adjusted 281,000 last week.

Applications for jobless benefits are surging in some states as coronavirus concerns shake the U.S. economy.

In Ohio, more than 48,000 people applied for jobless benefits during the first two days of this week, the Associated Press reports. The tally during the same period the prior week: just 1,825.

Across the country, in California, Gov. Gavin Newsom announced a huge spike in claims, according to KOVR. Eighty-thousand claims were filed on Tuesday alone, compared to an average day when 2,000 claims are filed.

The sharp increases come as governments have ordered millions of workers, students and shoppers to stay home as a precaution against spreading the virus that causes the COVID-19 disease.

In some states, the demand for help may outstrip the ability to pay claims.

Treasury Secretary Steven Mnuchin warned lawmakers that the U.S. unemployment rate could spike to almost 20 percent, from its current level of 3.5 percent, The Washington Post reports.

The U.S. Labor Department says 21 states began the year with unemployment insurance fund balances below the levels recommended to stay solvent in a recession.

States are expected to get some help from the federal government.

Federal officials are focusing on the Trump administration’s $1 trillion plan to stabilize a national economy reeling from the impact of the coronavirus outbreak.

The plan’s centerpiece is $500 billion to start issuing direct payments to Americans by early next month. The amounts would depend on income and family size. It would also funnel cash to businesses to help keep workers on payroll.

On Wednesday, Congress approved a $100 billion-plus bill to boost testing for the virus and guarantee paid sick leave for millions of workers hit by it. President Donald Trump quickly signed the bill into law.

Copyright 2020 Associated Press. All rights reserved. Gray Media Group, Inc., contributed to this report.