WASHINGTON (Reuters) - A staggering 16.8 million Americans have filed for unemployment benefits in the last three weeks, with weekly new claims topping 6 million for the second straight time last week as the novel coronavirus outbreak relentlessly savages the economy.

Thursday’s weekly jobless claims report from the Labor Department, the most timely data on the economy’s health, strengthens economists’ expectations of job losses of up to 20 million in April and their conviction that the economy is in deep recession. It also underscored an urgent need for more fiscal stimulus to halt the free fall, economists said.

“In its first month alone, the coronavirus crisis is poised to exceed any comparison to the Great Recession,” said Daniel Zhao, senior economist at Glassdoor, a website recruitment firm. “The new normal for unemployment insurance claims will be the canary in the coal mine for how long effects of the crisis will linger for the millions of newly unemployed Americans.”

The record unemployment insurance claims numbers are the result of businesses such as restaurants, bars and other social venues being shuttered as states and local governments implement tough measures to control the spread of COVID-19, the respiratory illness caused by the coronavirus.

Initial claims for state unemployment benefits slipped 261,000 to a seasonally adjusted 6.606 million for the week ended April 4, the government said. Data for the prior week was revised to show 219,000 more applications received than previously reported, taking the tally for that period to an all-time high of 6.867 million.

All told, a record 16.78 million people have filed claims for jobless benefits since the week ending March 21.

Economists polled by Reuters had forecast claims would fall to 5.250 million in the latest week, though estimates in the survey were as high as 9.295 million.

“Today’s report continues to reflect the purposeful sacrifice being made by America’s workers and their families to slow the spread of the coronavirus,” Labor Secretary Eugene Scalia said in a statement.

Last week’s moderation in claims is probably temporary, as more than 95% of Americans are now under “stay-at-home” or “shelter-in-place” orders. Reports are mounting of state employment offices being overwhelmed by a flood of applications.

The breadth of businesses shuttered has widened to include those in transportation, construction, manufacturing, agriculture, administration and health care. Retailers have also furloughed workers. California, New York state, Michigan, Florida, Georgia, Texas, New Jersey, Indiana, Ohio, North Carolina and Alabama had the most applications in the week ending March 28.

Labor market turmoil resulted in consumer sentiment tumbling a record 18.1 points in early April to 71.0, the lowest reading since December 2011, a separate report showed on Thursday.

FILE PHOTO: People gather at the entrance for the New York State Department of Labor offices, which closed to the public due to the coronavirus disease (COVID-19) outbreak in the Brooklyn borough of New York City, U.S., March 20, 2020. REUTERS/Andrew Kelly/File Photo

The Federal Reserve on Thursday rolled out a broad, $2.3 trillion effort to bolster local governments and small and mid-sized businesses in its latest move to keep the economy intact. Fed Chair Jerome Powell said the U.S. central bank would continue to use all the tools at its disposal until the economy started to fully rebound.

President Donald Trump last month signed a historic $2.3 trillion rescue package, which made provisions for companies and the unemployed. Both Trump and U.S. House of Representatives Speaker Nancy Pelosi have floated an infrastructure stimulus.

Stocks on Wall Street rallied on the latest stimulus from the Fed, while the dollar .DXY declined against a basket of currencies. Prices of U.S. Treasuries were trading higher.

UNEMPLOYMENT RATE OVER 10%?

The government reported last Friday that the economy purged 701,000 jobs in March. That was the biggest loss of jobs since the 2007-2009 Great Recession and ended an employment boom that started in late 2010, which was the longest in U.S. history.

“Given the extraordinary upending of the labor market we’ve already experienced and the fact that the situation is still deteriorating, federal policymakers absolutely need to do more,” said Heidi Shierholz, a former chief economist at the Labor Department and now head of policy at the Economic Policy Institute in Washington.

But with the recent package greatly enhancing unemployment benefits, some economists are concerned that businesses are encouraging their lowest paid hourly workers to take advantage of an extra $600 per week for up to four months.

This is on top of existing jobless benefits, which averaged $385 per person per month in January. It is equivalent to $15 per hour for a 40-hour workweek. The government-mandated minimum wage is about $7.25 per hour.

“For as long as the extra $600 per week addition to unemployment compensation persists, total payments to lower paid workers will likely replace all of what they lost, and maybe even more,” said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania. “The incentive for many unemployed is to not accept a job offer to return to work.”

Thursday’s claims report also showed the number of people continuing to receive benefits after an initial week of aid shot up 4.396 million to a record 7.455 million in the week ending March 28, obliterating the previous all-time high of 6.635 million set in May 2009.

The so-called continuing claims data is reported with a one-week lag and is viewed as a better gauge of unemployment and its impact on gross domestic product.

With claims in uncharted territory, economists say the unemployment rate will in April easily blow past the Great Recession’s peak of 10.0% and the post-World War II high of 10.8% touched in December 1982. The economy is believed to have contracted sharply in the first quarter, with an historic decline in GDP being forecast for the second quarter. Economists say the economy entered recession in March.

The National Bureau of Economic Research, the private research institute regarded as the arbiter of U.S. recessions, does not define a recession as two consecutive quarters of decline in real GDP, as is the rule of thumb in many countries. Instead, it looks for a drop in activity, spread across the economy and lasting more than a few months.