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Editor’s note: This story has been updated with new information from the Vermont Department of Labor.

The state labor department received 14,784 claims for unemployment last week. The huge spike in claims came in the wake of coronavirus-related layoffs.

Michael Harrington, interim commissioner, told lawmakers Thursday that the total number of claims — processed and unprocessed — is an all-time record.

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The number of people applying for unemployment insurance is three times higher than the previous record.

Officially, the number of Vermonters who lost their jobs and applied for unemployment insurance was 3,667, according to the Bureau of Labor Statistics. There have been only three weeks where applications exceeded last week’s number, and those happened when retail employees were laid off at the end of the holiday shopping season.

To put last week’s applications in perspective, during the week ending March 14, applications totaled 659, less than the weekly average of the past 35 years. At the peak of the Great Recession in 2008-2009 there were only two weeks when more than 2,000 Vermonters applied for unemployment insurance.

Vermont is not alone in seeing the steepest rise on record. Nationally, 3.3 million people applied for unemployment insurance. The previous week’s number was 282,000. That increase breaks all records.

Last week was just the beginning of large numbers of layoffs. When this week’s number is tabulated and released next Thursday, we’ll see thousands more people applying for unemployment insurance and that high number may continue for a third week.

The number of new applications is likely to be higher for several reasons. First, more workers were laid off this week due to Governor Scott’s announcement of additional emergency closures. Second, the Vermont Department of Labor has been swamped with electronic applications for unemployment insurance, as has every other state. They are still working through last week’s backlog and that will no doubt continue through this week and possibly next.

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There are some bright spots—or maybe some less-dark spots. Many of the laid off workers are eligible for state unemployment benefits. And the federal stimulus bill, passed in the wee hours of Thursday morning, adds up to $600 per week in additional benefits. The bill also expands eligibility in several ways, including making self-employed workers eligible for benefits. That’s a very big deal for those people.

In addition, while the number of people applying for benefits skyrocketed, Vermont’s increase, as reported by Harrington on Thursday, was 22 times higher than last week’s claim rate. Nationally, the increase was 11.5 times greater. However, many states like California and New York were swamped like Vermont and have not reported the actual number of claims. Next week, the numbers will likely swell.

This sharp employment decline comes on top of an economy that basically has been stuck in the water for the last four years, at least when we look at the employment numbers.

Each year in March all 50 state labor departments revise their estimates of jobs and unemployment for the past few years based on better and more complete data. For Vermont, those revisions showed the state had a record 316,100 jobs in 2019.

But that was up a scant 100 jobs from 2018. Moreover, the 2019 job count was revised down by 900 jobs, not a huge amount, but an indication that what we thought was going on last year was better than the reality.

In 2016 Vermont’s total employment was 313,300 which means Vermont employers added 2,800 jobs in total in the past three years. To put that in perspective, the state’s job count increased by more than 3,000 each year from 1993 to 2001. Or, that the nearly 4,000 people who lost their jobs and applied for unemployment insurance last week more than eats up all those gains.

However long the current economic shutdown lasts, it is sure to mean that the U.S. and Vermont economies are in a recession. Even if the shutdown ends at the end of April, it will take months for economic activity to recover.

Vermont’s total 2020 job count will be less than the 2019 numbers. That will be the first time that’s happened in a decade.

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