Labor secretary warns coronavirus pandemic to cause unemployment spike: 'It's going to be a large number'
Jobless claims in the U.S. are already climbing, and are expected to surge in coming weeks
Labor Secretary Eugene Scalia acknowledged on Monday the coronavirus pandemic, which has forced American life to come to a near standstill, threatening to plunge the economy into a recession that could rival the 2008 financial crisis, will cause a significant spike in unemployment.
Although Scalia declined to provide specific numbers -- or comment on speculation from Federal Reserve Bank of St. Louis President James Bullard that unemployment could surge to 30 percent in the second quarter -- he stressed that the number of Americans filing for unemployment benefits is "going to go up."
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"We know it’s going to be a large number," he told FOX Business' Stuart Varney.
Still, Scalia noted that the U.S. economy was coming into the headwinds on a "very strong" foundation. In February, employers added 273,000 jobs, while unemployment returned to 3.5 percent, a half-century low.
"Let's keep in mind that we are coming into this from a strong foundation, with a president who’s shown an ability to help the private sector grow jobs," Scalia said.
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Jobless claims in the U.S. are already climbing -- last Thursday, the Labor Department said the number of Americans filing applications for jobless benefits jumped to 281,000 for the week ending March 14, the highest level since June 2017 -- and are expected to surge in coming weeks.
A recent Goldman Sachs analyst note estimated that filings for U.S. unemployment benefits likely skyrocketed to a record 2.25 million last week as the coronavirus pandemic forced businesses across the country to shut down. The previous record of 695,000 was set in 1982.
One concern as unemployment rises is states' inability to handle the influx of requests. Despite the historically long, 11-year economic expansion, 22 states' unemployment trust funds are unprepared to pay out enough in unemployment benefits in the case of a recession, according to Labor Department data.
But Scalia said the federal government was coordinating with the unemployment offices to ensure they're able to make insurance available to Americans.
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"We are working with them on a constant basis to make the funds available," he said.