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A third coronavirus stimulus package was announced by the Senate, reaching $2 trillion and including direct payments to individuals and hospitals.

USA TODAY

Layoffs are skyrocketing as the coronavirus upends the U.S. economy.

The number of Americans filing initial applications for unemployment benefits jumped nearly twelvefold to a record 3.3 million last week, the Labor Department said Thursday, offering the most vivid evidence yet of the coronavirus’s widespread damage to the economy.

The total was well above the 1.5 million claims economists had forecast, according to the median estimate of those surveyed by Bloomberg.

The pandemic has set off the most abrupt near-shutdown of the economy in history. Many restaurants, shops, movie theaters, sports arenas and other gathering spots across the country suddenly closed their doors or scaled back service last week to contain the spread of the virus.

Layoffs continued last week in accommodation and food services, Labor said. Other industries hit hard included health care and social assistance, arts, entertainment and recreation, transportation and warehousing, and manufacturing industries, Labor said.

Economists’ estimate of the jobless claims total – a reliable gauge of layoffs across the country – varied widely, from as little as 1 million or so to upwards of 4 million.

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The actual total was on the higher side and so could roil stocks, says Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. Markets had surged this week on hopes Congress will pass a $2 trillion relief package for American households and businesses after plunging more than 30% from its all-time high in mid-February as the outbreak spread . The Senate approved the measure late Wednesday.

The previous week’s jobless claims total was revised up marginally, to 282,000 from 281,000. The four-week average, which normally smooths out volatility, jumped by 765,750 to 998,250.

Last week’s total is several times larger than the previous record tally of 695,000 jobless claims in October 1982. It also far surpasses the count of 517,000 two weeks after the 9/11 terrorist attacks, and 570,000 during the depths of the financial crisis in December 2008, Morgan Stanley said.

The concern is that “layoffs are just starting,” says economist Kathy Bostjancic of Oxford Economics.

Marriott has said it will furlough tens of thousands of employees. McMenamins, which operates brewpubs and hotels in the Northwest, is laying off 3,000 workers. Other job cuts include 145 drivers at the Port of Los Angeles, 360 by Oyo Hotels and 250 by Christie Lites, a stage lighting company, according to outplacement firm Challenger, Gray and Christmas.

Mark Zandi, chief economist of Moody’s Analytics, estimates that ultimately the outbreak will result in about 7.5 million layoffs, largely in the second quarter, as the 3.5% unemployment rate, a 50-year low, climbs above 10%.

St. Louis Fed chief James Bullard has estimated unemployment would reach 30% and Treasury Secretary Steven Mnuchin said 20%. Those figures would spell tens of millions of layoffs but they didn’t include the relief measure.

Economists differed sharply in their forecasts for last week’s claims because many states released partial-week reports to media outlets, leading economists to extrapolate weekly tallies for all the states.

Such state reports previewing the figures may not continue. In a recent letter, the Labor Department asked the states to no longer report their totals until Labor releases its national figure on Thursday.

“The data from these reports is monitored closely by policymakers and financial markets to determine appropriate actions in light of fast-changing economic conditions,” Gay Gilbert, the administrator of Labor Department’s Office of Employment, wrote in the letter.

In a statement to USA TODAY, Labor said, “To maintain a level playing field for everyone in the public, important economic indicators like the weekly unemployment claims should be presented as they have been, in a predictable weekly update. The public must be able to trust in the accuracy, integrity and completeness of the data being reported. Premature release of partial data may give the public an inaccurate picture. Right now, it’s more crucial than ever that the public receives accurate information.”

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