New unemployment filings are so high only the Great Depression compares

The US Department of Labor registered 5.2 million initial unemployment insurance claims for the week ending April 11, bringing the total filings to 22 million since social distancing measures took effect in March — a pace of economic collapse so staggering that the Great Depression is the only comparison.

Last week’s claims slightly improved upon the 6.6 million initial claims the previous week, and the 6.9 million claims the week before that. But even if the peak of the joblessness wave seems to be behind us, the US is in uncharted waters. Before the coronavirus outbreak, the worst-ever initial claims number was about 700,000 job losses back in 1982.

Economists offer two caveats to this data. One is that the recently enacted CARES Act to cushion the economic blow of the pandemic expands the scope of unemployment insurance eligibility to cover more independent contractors and gig economy workers. So claims are surging, at least in part, because more people are eligible, making comparisons to past data slightly invalid.

At the same time, state UI systems — which are often built on obsolete code, starved of resources by state governments, and not designed to handle this volume of claims — have become overwhelmed, with people unable to get through on the phone or online. Consequently, the actual number of people trying to apply for assistance likely exceeds the numbers the country is seeing.

The official unemployment rate leapt from historic lows to 4.4 percent in March, according to official government data, but the numbers were based on a reference week that ended March 15, before the worst of the unemployment claims surge began.

That means the current jobless rate is almost certainly much worse than that — experts believe somewhere in the range of 12-15 percent, the worst on record since the Great Depression when unemployment reached 24 percent.