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Politics

Historic $2.2 trillion coronavirus bill passes U.S. House, headed to Trump

WASHINGTON (Reuters) – The U.S. House of Representatives on Friday approved a $2.2 trillion aid package – the largest in American history – to help people and businesses cope with the economic downturn inflicted by the coronavirus pandemic.

The massive bill also rushes billions of dollars to medical providers on the front lines of the outbreak. Republican President Donald Trump said he would sign it at 4 p.m. EDT (2000 GMT).

“Our nation faces an economic and health emergency of historic proportions due to the coronavirus pandemic, the worst pandemic in over 100 years,” House Speaker Nancy Pelosi said at the close of a three-hour debate on the House floor. “Whatever we do next, right now we’re going to pass this legislation.”

Democrats and Republicans in the Democratic-led House approved the package on a voice vote, turning back a procedural challenge from Republican Representative Thomas Massie, who had sought to force a formal, recorded vote that could have delayed its passage.

Massie, an independent-minded Republican who has repeatedly defied party leaders, wrote on Twitter that he thought the bill contained too much extraneous spending and gave too much power to the Federal Reserve. His fellow lawmakers overruled his request.

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  • Factbox: What's in the $2.2 trillion U.S. coronavirus rescue package
  • Factbox: 'Mr. No': Meet the U.S. congressman who requested a formal vote to delay the coronavirus bill

On Twitter, Trump called Massie a “third rate Grandstander” and said he should be thrown out of the Republican Party. “He just wants the publicity,” wrote Trump, who last week began pushing for urgent action on coronavirus after long downplaying the risk.

Democratic and Republican leaders asked members to return to Washington to ensure there would be enough present to head off Massie’s gambit. Lawmakers from as far away as California were present for the debate. The session was held under special rules to limit the spread of the disease among members, who used hand sanitizer and in at least one case wore protective gloves.

At least three members of Congress have tested positive for the coronavirus and more than two dozen have self-quarantined to limit its spread.

The Senate, which approved the bill in a unanimous vote on Wednesday evening, has adjourned and is not scheduled to return to Washington until late April.

Older people have proven especially vulnerable to COVID-19, the disease caused by the coronavirus. The average age of House members was 58 at the beginning of 2019, well above the average age of 38 for the U.S. population as a whole.

‘THE VIRUS IS HERE’

Democratic and Republican leaders appeared together at a news conference to celebrate the bill’s passage — an unusual event for a chamber that is normally sharply divided along partisan lines.

“The virus is here. We did not ask for it, we did not invite it. We did not choose it. But with the passing of the bill you will see that we will fight it together, and we will win together,” said Kevin McCarthy, the top House Republican.

He did not say whether Massie would face any disciplinary measures from the party.

The rescue package is the largest fiscal relief measure ever by Congress.

The $2.2 trillion measure includes $500 billion to help hard-hit industries and $290 billion for payments of up to $3,000 to millions of families.

It will also provide $350 billion for small-business loans, $250 billion for expanded unemployment aid and at least $100 billion for hospitals and related health systems.

The rare but deep bipartisan support in Congress underscored how seriously lawmakers are taking the global pandemic as Americans suffer and the medical system threatens to buckle.

On Thursday, the United States surpassed China and Italy on as the country with the most coronavirus cases. The number of U.S. cases passed 87,000, and the death toll exceeded 1,300.

Adding to the misery, the Labor Department reported the number of Americans filing claims for unemployment benefits surged to 3.28 million, the highest level ever.

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World News

Taliban refuses to talk to new Afghan government negotiators

KABUL/PESHAWAR, Pakistan (Reuters) – The Taliban declined on Saturday to begin talks with the Afghan government’s new negotiating team in a setback to the U.S.-brokered peace process for one of the world’s longest-running conflicts.

Spokesman Zabihullah Mujahid said the militants could not talk to the 21-member team named on Thursday as it was not constituted taking into account all parties.

The team is headed by Masoom Stanekzai, an ex-security chief and supporter of President Ashraf Ghani, and includes politicians, former officials and representatives of civil society. Five members are women.

“In order to reach true and lasting peace, the aforementioned team must be agreed upon by all effective Afghan sides so that it can represent all sides,” said Mujahid.

The United States, which ousted the Taliban from power in 2001, signed a troop withdrawal deal with the group in February.

But progress on moving to talks between the militants and the Afghan government has been delayed by a feud between Afghan politicians, and disagreement between the Taliban and the government prisoner releases and a possible ceasefire.

Afghan ministry of peace affairs spokeswoman Najia Anwari said the Taliban’s stance was unjustified as the negotiating team was made after wide consultations among Afghan society.

Ghani’s political rival Abdullah Abdullah has not confirmed whether he will support the delegation, potentially important given his camp’s strong influence in the north and west.

Abdullah’s spokesman Fraidoon Khwazoon said that though the announced list was not final and there were “considerations that needed to be addressed”, it should not be rejected outright.

“All sides including the Taliban should try not to lose the available opportunity for peace, by make illogical excuses. The Taliban should not lose the current opportunity.”

The U.S. Embassy did not immediately respond to requests for comment on Saturday.

U.S. Secretary of State Mike Pompeo failed to mediate between Abdullah and Ghana to create an “inclusive” government during a visit to Kabul on Monday, and announced a $1 billion cut in U.S. aid to Afghanistan, which he said could be reversed.

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Politics

Pelosi expects bipartisan House vote for $2 trillion coronavirus bill Friday

WASHINGTON (Reuters) – U.S. House Speaker Nancy Pelosi said she expected the chamber to pass an estimated $2.2 trillion coronavirus relief bill when it meets on Friday, after the Senate overwhelmingly approved the unprecedented economic rescue legislation Wednesday evening.

“Tomorrow we’ll bring the bill to the floor. It will pass with strong bipartisan support,” Pelosi, a Democrat, told reporters.

The legislation will rush direct payments to Americans within three weeks once the Democratic-controlled House passes it and Republican President Donald Trump signs it into law, Treasury Secretary Steven Mnuchin said.

The Republican-led Senate approved the bill – which would be the largest fiscal stimulus measure ever passed by Congress – by 96 votes to zero late on Wednesday, overcoming bitter partisan negotiations and boosting its chances of passing the House.

The unanimous Senate vote, a rare departure from bitter partisanship in Washington that followed several days of wrangling, underscored how seriously members of Congress are taking the global pandemic as Americans suffer and the medical system reels.

“When there’s a crisis of this magnitude, the private sector cannot solve it,” Senate Democratic Leader Chuck Schumer said.

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“Individuals, even with bravery and valor, are not powerful enough to beat it back. Government is the only force large enough to staunch the bleeding and begin the healing.”

The package is intended to flood the country with cash in an effort to stem the crushing impact on the economy of an intensifying pandemic that has killed about 1,000 people in the United States and infected nearly 70,000.

Pelosi said there was no question more money would be needed to fight the coronavirus. She said House committees would be working on the next phase in the near term, even if the full chamber is not in session. She said lawmakers would need to be on call for possible votes.

House Republican Leader Kevin McCarthy also backs the relief plan, but said he wanted it to be allowed to work before deciding whether more legislation was needed.

“This will be probably the largest bill anybody in Congress has ever voted for,” he told reporters.

Only two other countries, China and Italy, have more coronavirus cases than the United States. The World Health Organization has warned the United States looks set to become the epicenter of the pandemic.

The American government’s intervention follows two other packages that became law this month. The money at stake amounts to nearly half of the total $4.7 trillion the federal government spends annually.

Trump, who has promised to sign the bill as soon as it passes the House, expressed his delight on Twitter. “96-0 in the United States Senate. Congratulations AMERICA!” he wrote.

Pelosi said House leaders were planning a voice vote on the rescue plan on Friday, but said leaders would be prepared for other contingencies. She had said a day earlier that if there were calls for a vote recorded by name, lawmakers might be able to vote by proxy, as not all would attend.

“If somebody has a different point of view (about the bill), they can put it in the record,” she said, referring to the Congressional Record.

McCarthy predicted the measure would pass Friday morning following a debate.

The massive bill, worth more than $2 trillion, includes a $500 billion fund to help hard-hit industries and a comparable amount for direct payments of up to $3,000 apiece to millions of families.

The legislation will also provide $350 billion for small-business loans, $250 billion for expanded unemployment aid and at least $100 billion for hospitals and related health systems.

The House has 430 members, most of whom have been out of Washington since March 14. Many want to return for the vote, but for all to attend would be difficult, given that at least two have tested positive for the coronavirus, a handful of others are in self-quarantine, and several states have issued stay-at-home orders. There are five vacant House seats.

The Senate’s No. 2 Republican, John Thune, missed Wednesday’s vote because he was not feeling well. His spokesman said Thune, 59, flew back to his state, South Dakota, on a charter flight Wednesday, accompanied by a Capitol Police officer and wearing a mask.

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Politics

Historic $2.2 trillion coronavirus bill passes U.S. House, becomes law

WASHINGTON (Reuters) – The U.S. House of Representatives on Friday approved a $2.2 trillion aid package – the largest in history – to help cope with the economic downturn inflicted by the intensifying coronavirus pandemic, and President Donald Trump quickly signed it into law.

The massive bill passed the Senate and House of Representatives nearly unanimously. The rare bipartisan action underscored how seriously Republican and Democratic lawmakers are taking the global pandemic that has killed more than 1,500 Americans and shaken the nation’s medical system.

“Our nation faces an economic and health emergency of historic proportions due to the coronavirus pandemic, the worst pandemic in over 100 years,” House Speaker Nancy Pelosi said at the close of a three-hour debate before the lower chamber approved the bill. “Whatever we do next, right now we’re going to pass this legislation.”

The massive bill also rushes billions of dollars to medical providers on the front lines of the outbreak.

But the bipartisan spirit seemed to end at the White House. Neither Pelosi nor Senate Democratic Leader Chuck Schumer was invited to Trump’s all-Republican signing ceremony for the bill, aides said.

Their Republican counterparts, House Minority Leader Kevin McCarthy and Senate Majority Leader Mitch McConnell, did attend, along with three Republican House members.

“This will deliver urgently needed relief to our nation’s families, workers and businesses,” Trump said. “I really think in a fairly short period of time … we’ll be stronger than ever.”

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  • Factbox: 'Mr. No': Meet the U.S. congressman who requested a formal vote to delay the coronavirus bill

The Democratic-led House approved the package on a voice vote, turning back a procedural challenge from Republican Representative Thomas Massie, who had sought to force a formal, recorded vote.

To keep Massie’s gambit from delaying the bill’s passage, hundreds of lawmakers from both parties returned to Washington despite the risk of contracting coronavirus. For many, that meant long drives or overnight flights.

One member who spent hours in a car was Republican Representative Greg Pence, the brother of Vice President Mike Pence, whom Trump has put in charge of efforts to handle the coronavirus crisis.

Pence drove the nearly 600 miles (966 km) from his home state, Indiana, to Washington on Thursday. “We can’t afford to wait another minute,” he said on Twitter.

‘THIRD RATE GRANDSTANDER’

Massie wrote on Twitter that he thought the bill contained too much extraneous spending and gave too much power to the Federal Reserve, the U.S. central bank. His fellow lawmakers overruled his request for a recorded vote.

Trump attacked Massie on Twitter, calling him a “third rate Grandstander” and saying he should be thrown out of the Republican party. “He just wants the publicity,” wrote the president, who last week began pushing for urgent action on coronavirus after long downplaying the risk.

Democratic and Republican leaders had asked members to return to Washington to ensure there would be enough present to head off Massie’s gambit. The session was held under special rules to limit the spread of the disease among members.

At least five members of Congress have tested positive for the coronavirus and more than two dozen have self-quarantined to limit its spread.

The Senate, which approved the bill in a unanimous vote late on Wednesday, has adjourned and is not scheduled to return to Washington until April 20.

Democratic and Republican House leaders appeared together at a news conference at the Capitol to celebrate the bill’s passage — an unusual event for a chamber that is normally sharply divided along partisan lines.

“The virus is here. We did not ask for it, we did not invite it. We did not choose it. But with the passing of the bill you will see that we will fight it together, and we will win together,” McCarthy said.

He did not say whether Massie would face any disciplinary measures from the party.

The rescue package is the largest fiscal relief measure ever passed by Congress.

The $2.2 trillion measure includes $500 billion to help hard-hit industries and $290 billion for payments of up to $3,000 to millions of families.

It will also provide $350 billion for small-business loans, $250 billion for expanded unemployment aid and at least $100 billion for hospitals and related health systems.

The number of coronavirus cases in the United States exceeded 100,000 on Friday, according to a Reuters tally, the most of any country.

Adding to the misery, the Labor Department reported the number of Americans filing claims for unemployment benefits surged to 3.28 million, the highest level ever.

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Business

Pence says virus taskforce soon to deliver recommendation on whether to re-open economy

(Reuters) – Vice President Mike Pence, heading the Trump administration’s response to the coronavirus outbreak, said on Saturday that he would deliver a recommendation to the president on whether to re-open the U.S. economy in the coming week.

Pence told the Fox News Channel that the taskforce he heads would base its decision on data and scientific advice.

“Ultimately the president will make a decision that he believes in the best interest of the American people,” he said.

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Business

U.S. not bailing out airlines, Boeing not using federal money: Treasury Secretary

WASHINGTON (Reuters) – U.S. Treasury Secretary Steve Mnuchin said on Friday that the coronavirus economic stimulus bill before Congress is not an airline bailout and that taxpayers will be compensated for relief given to companies hobbled by the global pandemic.

At the same time, Mnuchin said in an interview with Fox Business Network that plane-maker Boeing Co (BA.N) has not requested government help.

“I’ve been very clear this is not an airline bailout,” Mnuchin said. “And that taxpayers need to be compensated for relief they’re giving to airlines.”

U.S. airlines are preparing to tap the government for up to $25 billion in grants to cover payroll in a sharp travel downturn triggered by the coronavirus, even after the government warned it may take stakes in exchange for bailout funds, people familiar with the matter said.

Mnuchin can demand equity, warrants or other financial instruments in order to “provide appropriate compensation to the federal government.” A Treasury spokeswoman declined to comment on a report that Mnuchin would demand equity.

Airlines can ask for the equivalent of their payroll between April 1 and Sept. 30 of last year, according to the terms of the bill, meaning some large airlines could get $4 billion or more in total.

The House of Representatives planned to debate the legislation on Friday, then schedule a vote.

Mnuchin said Boeing said it does not intend to participate in the federal program. “Boeing has said that they have no intention of using a program that may change in the future,” Mnuchin said. “These are things that the companies need to come and ask us for. … Right now Boeing’s saying they don’t need it.”

Asked if the large stimulus bill could help avoid a recession, Mnuchin told Fox Business, “The No. 1 issue is not what the economic numbers are right now, the No. 1 issue is the hardship to the American people who are losing their jobs.”

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World News

Iran has no knowledge of former FBI agent's whereabouts: Iranian official

DUBAI (Reuters) – Tehran has no knowledge about the whereabouts of a former FBI agent who disappeared in Iran in March 2007, a spokesman for the Iranian mission at the United Nations said on Thursday.

The family of the man, Robert Levinson, said earlier that he had died in Iranian custody.

“Iran has always maintained that its officials have no knowledge of Mr. Levinson’s whereabouts, and that he is not in Iranian custody. Those facts have not changed,” Iranian mission spokesman Alireza Miryousefi said in a Tweet.

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Levinson’s family said in a posting on social media and a website on Wednesday: “Today with aching hearts, we are sharing devastating news about Robert Levinson, the head of our family.”

U.S. President Donald Trump said he had not been told that Levinson was dead. White House national security adviser Robert O’Brien said later that an investigation was still going on but “we believe that Bob Levinson may have passed away some time ago”.

Tehran denied knowledge of Levinson’s whereabouts last November, when it said a legal case involving him was under way at a revolutionary court that handles security-related cases. Levinson went missing on Iran’s Kish island in the Gulf.

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World News

Tehran says missing former U.S. agent left Iran years ago

DUBAI (Reuters) – Tehran said on Thursday that a former FBI agent who disappeared in Iran 13 years ago had left the country a long time ago, despite his family saying a day earlier that he had died in Iranian custody.

Robert Levinson went missing on Iran’s Kish Island in the Gulf in March 2007. The case is another irritant in the already hostile relationship between Washington and Tehran.

Levinson’s family said on Wednesday it now believed Levinson died in Iranian custody, based on information from U.S. officials.

“Today with aching hearts, we are sharing devastating news about Robert Levinson, the head of our family,” they said in a statement.

However, Iran’s foreign ministry spokesman said on Thursday

that, based on what he called credible evidence, Levinson had left Iran “years ago” for an unspecified destination.

“In the past years Iran has tried to find out his state but could not find any signs of him being alive,” spokesman Abbas Mousavi said, according to state television.

Reuters reported in 2013 that Levinson, a private detective and former FBI agent, was investigating allegations of corruption by well-connected people in Iran.

Lawyer David McGee said then that Levinson was trying to trace money laundered through Iranian exiles living in Toronto.

U.S. officials had acknowledged to Reuters that Levinson had a relationship with the CIA as a source at the time he visited Kish Island and disappeared.

A video released in 2011 showed him pleading for help. It did not say who was holding him or where.

Tehran denied knowledge of Levinson’s whereabouts last November, when it said a legal case involving him was under way at a revolutionary court that handles security-related cases.

“Iran has always maintained that its officials have no knowledge of Mr. Levinson’s whereabouts, and that he is not in Iranian custody. Those facts have not changed,” the spokesman for Iran’s mission at the United Nations, Alireza Miryousefi, said on Thursday.

U.S. President Donald Trump said on Wednesday he had not been told that Levinson was dead.

But White House national security adviser Robert O’Brien said later that an investigation was still going on but “we believe that Bob Levinson may have passed away some time ago”.

Levinson’s family said in their statement: “We recently received information from U.S. officials that has led both them and us to conclude that our wonderful husband and father died while in Iranian Custody.”

They said they did not know when or how he died but that it was before the coronavirus epidemic hit Iran. Nor did they know if Levinson’s body would ever be returned to them.

O’Brien said Iran must provide a complete accounting of what happened to Levinson.

Levinson disappeared after flying from Dubai to Kish in 2007. There he met with Daoud Salahuddin, an American Islamic militant who fled to Iran while facing charges in the murder of an Iranian embassy official based in Washington.

Levinson, then a private investigator, was seeking information on alleged corruption involving former Iranian president Akbar Hashemi Rafsanjani and his family, sources familiar with his work said.

The Iranian government has never publicly acknowledged any role in Levinson’s abduction, though at the time of his disappearance a government-affiliated media outlet said he was “in the hands of Iranian security forces”.

Related Coverage

  • Tehran says former FBI agent Levinson left Iran years ago

Some U.S. investigators at least until recently believed Levinson was still alive, while officials at other U.S. agencies believe he died some time, perhaps years, ago.

The United States and the Islamic Republic are longtime foes. Washington opposes Tehran’s influence in the Middle East and backs its regional rival Saudi Arabia. They also support opposing sides in wars in Yemen and Syria.

Washington also maintains tough economic sanctions on Iran. In 2018, Trump pulled the United States out of an international agreement which curbed Iran’s nuclear program.

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Business

U.S. consumer sentiment near three-and-a-half-year low, spending tepid

WASHINGTON (Reuters) – U.S. consumer sentiment dropped to near a 3-1/2-year low in March as the coronavirus epidemic upended life for Americans, and consumer spending was sluggish in February, strengthening economists’ expectations of a deep recession.

The reports on Friday followed on the heels of data on Thursday that showed the number of Americans filing for unemployment benefits rocketed to a record 3.28 million last week, eclipsing the previous record of 695,000 set in 1982.

The highly contagious virus, which causes a respiratory illness called COVID-19, is wreaking havoc on the economy, prompting the Federal Reserve to take extraordinary measures and the U.S. Congress to assemble a record $2 trillion stimulus. Economists say the economy is already in recession.

“People are struggling to understand the magnitude and duration of the economic shock from COVID-19,” said Chris Low, chief economist at FHN Financial in New York. “Job losses are the most vivid demonstration of the new reality. As the reality sinks in, confidence is likely to fall into the mid-50s by May.”

The University of Michigan’s Consumer Sentiment Index fell to a reading of 89.1 this month, the lowest level since October 2016, from a final reading of 101.0 in February. It was the largest monthly drop in the index since October 2008, during the height of the financial crisis.

Economists polled by Reuters had forecast sentiment would drop to a final reading of 90.0 this month.

A measure of consumers’ perceptions of current economic conditions dropped to 103.7 this month from a reading of 114.8 in February. The survey’s gauge of consumer expectations tumbled to reading of 79.7 from 92.1 in February.

“Stabilizing confidence at its month’s-end level will be difficult given surging unemployment and falling household incomes,” Richard Curtin, chief economist for the Surveys of Consumers. “The extent of additional declines in April will depend on the success in curtailing the spread of the virus and how quickly households receive funds to relieve their financial hardships.”

In a separate report on Friday, the Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.2% last month as households spent more on electricity and gas, offsetting decreases in outlays on motor vehicles and parts as well as recreational goods. Last month’s increase matched the gain in January and was in line with economists’ expectations.

The United States now has the most coronavirus cases in the world, with more than 85,000. Governors in more than half of the nation’s 50 states have ordered residents to stay mostly indoors, affecting over 100 million people.

Restaurants and bars have been shuttered, and airline travel severely curtailed, which economists say will greatly offset any boost to consumer spending from grocery purchases following a wave of panic buying as Americans prepared to hunker down.

When adjusted for inflation, consumer spending edged up 0.1% for a third straight month in February.

U.S. stocks were trading lower as investors’ focus shifted from the stimulus efforts to the damaging toll the coronavirus is inflicting on the economy. The dollar .DXY fell against a basket of currencies. Prices of U.S. Treasuries were trading mostly higher.

MILLIONS UNEMPLOYED

With “social distancing” measures to contain the virus throwing millions out of work and severely curtailing discretionary spending, economists are predicting a moderate decline in consumer spending in the first quarter, which would give way to a sharper contraction in the second quarter.

“Social distancing measures taken in response to the fast-spreading coronavirus along with extreme financial market volatility will take a severe toll on the main engine of economic growth,” said Lydia Boussour, a senior U.S. economist at Oxford Economics in New York.

Consumer spending grew at an annualized rate of 1.8% in the fourth quarter, slowing from the brisk 3.2% pace logged in the July-September period.

Labor market strength, which was driving a steady pace of wage growth, was the economy’s main pillar of support. In February, personal income increased 0.6%, matching January’s rise. Income was boosted by higher wages and government payments to farmers caught in the 20-month long U.S.-China trade war.

Wages advanced 0.5% last month. Income, excluding government subsidies, will be closely watched for clues on the magnitude of the anticipated economic downturn.

Income is one of the four monthly indicators tracked by the National Bureau of Economic Research, the prestigious private research institute that is regarded as the arbiter of U.S. recessions. The NBER does not define a recession as two consecutive quarters of decline in real gross domestic product, as is the rule of thumb in many countries.

Instead, it looks for a decline in economic activity, spread across the economy and lasting more than a few months.

“The current crisis means change is afoot,” said Tim Quinlan, a senior economist at Wells Fargo Securities in Charlotte, North Carolina. “A record-shattering increase in jobless claims suggests that transfer payments will likely be the only facet of income rising in the months ahead.”

With income growth outpacing spending, savings increased to $1.38 trillion in February, the highest in a year, from $1.32 trillion in January.

Inflation remained moderate in February. Consumer prices as measured by the personal consumption expenditures (PCE) price index excluding the volatile food and energy components rose 0.2% for a third straight month in February. That lifted the annual increase in the so-called core PCE price index to 1.8% in February, the biggest gain since August, from 1.7% in January.

The core PCE index is the Fed’s preferred inflation measure. It missed the central bank’s 2% target in 2019.

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Business

U.S. weekly jobless claims soar to record 3.28 million

WASHINGTON (Reuters) – The number of Americans filing claims for unemployment benefits surged to a record of more than 3 million last week as strict measures to contain the coronavirus pandemic brought the country to a sudden halt, unleashing a wave of layoffs that likely ended the longest employment boom in U.S. history.

The weekly jobless claims report from the Labor Department on Thursday offered the clearest evidence yet of the coronavirus’ devastating impact on the economy, which has forced the Federal Reserve to take extraordinary steps and the U.S. Congress to assemble a record $2 trillion stimulus package.

Economists say the economy is already in recession. Weekly claims are the most timely labor market indicator. With nearly half the country’s population under some form of a lockdown and reports of state employment websites overwhelmed, economists are bracing for further increases in jobless claims.

“With partial lockdowns across the country leading to a sudden stop in economic activity, the U.S. economy will experience the largest economic contraction on record with the most severe surge in unemployment ever,” said Gregory Daco, chief U.S. economist at Oxford Economics in New York.

“We expect jobless claims will continue to climb as more economic activity shuts down.”

Initial claims for unemployment benefits rose 3.00 million to a seasonally adjusted 3.28 million in the week ending March 21, eclipsing the previous record of 695,000 set in 1982, the Labor Department said. That also dwarfed the peak of 665,000 in applications during the 2007-2009 recession, during which 8.7 million jobs were lost.

Economists polled by Reuters had forecast claims would rise to 1 million, though estimates were as high as 4 million.

The Labor Department attributed the surge to COVID-19, the respiratory illness caused by the coronavirus. A running tally kept by Johns Hopkins University showed that at least 1,046 people in the country have died from COVID-19.

“This large increase in unemployment claims was not unexpected, and results from the recognition by Americans across the country that we have had to temporarily halt certain activities in order to defeat the coronavirus,” U.S. Labor Secretary Eugene Scalia said in a statement.

Layoffs were concentrated in the accommodation and food service, health care and social assistance, arts, entertainment and recreation, transportation and warehousing, and manufacturing industries.

Mounting job cuts and a sinking economy have prompted President Donald Trump, who is running for re-election in November, to push for businesses to reopen by Easter, which is April 12. With infections and the death toll rising, many health experts, economists and politicians have argued against such a move.

Fed Chair Jerome Powell said on Thursday in an interview on NBC’s “Today” show that the economy “may well be in recession” but progress in controlling the spread of the coronavirus will dictate when the economy can fully reopen.

Recessions in the United States are called by the National Bureau of Economic Research. The NBER does not define a recession as two consecutive quarters of decline in real gross domestic product, as is the rule of thumb in many countries. Instead, it looks for a drop in economic activity, spread across the economy and lasting more than a few months.

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The economy grew at a 2.1% annualized rate in the fourth quarter, the Commerce Department confirmed in another report on Thursday. The department also reported a 9.1% plunge in the goods trade deficit to $59.9 billion in February, as well as declines in wholesale and retail inventories, as the coronavirus helped to depressed imports.

Stocks on Wall Street were trading higher, with expectations rising that the record jump in unemployment benefits would spur additional fiscal relief. The dollar .DXY fell against a basket of currencies, while prices of U.S. Treasuries rose.

(Graphic: Unemployment benefits claims hit all-time high, here)

PAYROLLS SEEN DECLINING

The pandemic has prompted governors in at least 18 states to order residents to stay mostly indoors. “Non-essential” businesses have also been ordered closed. According to economists, a fifth of the workforce is on some form of lockdown.

The historic fiscal stimulus package, which is now before the U.S. House of Representatives, would increase payments for the unemployed by up to $600 per week per worker, and laid-off workers would get those payments for up to four months. Regular benefits, which typically run out after six months in most states, would be extended for an additional 13 weeks.

Unadjusted claims for California and Washington state, Ohio, New Jersey, Illinois, Texas and Massachusetts increased by more than 100,000 last week. Pennsylvania reported unadjusted claims increased more than 300,000.

Last week’s claims data likely will have no impact on March’s employment report as it falls outside the period during which the government surveyed employers for nonfarm payrolls, which was the week ended March 14.

Still, the unprecedented surge in jobless claims likely signals a record streak of 113 months of U.S. employment growth, dating to October 2010, came to an end this month.

“Jobs will decline in March,” said Mark Zandi, chief economist at Moody’s Analytics in West Chester, Pennsylvania. “There are numerous reports of laid-off workers unable to file for unemployment insurance because so many people are trying to file at the same time. Millions of job losses are likely in coming weeks.”

(Graphic: End of a historic jobs boom, here)

Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid increased 101,000 to 1.80 million for the week ended March 14, the highest since April 2018.

The so-called continuing claims data covered the period during which the government surveyed households for March’s unemployment rate. Continuing claims increased 110,000 between the February and March survey week, suggesting the unemployment rate will probably rise this month from the current 3.5%.

“We would be amazed if it didn’t exceed 10% by May, if not April,” said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto. “The unemployment rate could remain elevated for years.”

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