WASHINGTON (Reuters) - Millions more Americans filed claims for unemployment benefits last week, suggesting that layoffs were spreading to industries that were not initially directly impacted by business closures and disruptions related to the novel coronavirus.

Other data on Thursday showed a record collapse in consumer spending in March as the economy reels from nationwide lockdowns to slow the spread of COVID-19, the respiratory illness caused by the virus. The reports came on the heels of news on Wednesday that the economy suffered its sharpest contraction since the Great Recession in the first quarter, ending the longest expansion in the United States’ history.

The deluge of grim economic numbers deprive President Donald Trump of a success story to campaign around as he seeks re-election in November, and could ramp up criticism of the White House’s initial slow response to the pandemic.

“The economy continues to print numbers that scare the living daylights out of everyone in the world,” said Chris Rupkey, chief economist at MUFG in New York.

Initial claims for state unemployment benefits totaled a seasonally adjusted 3.839 million for the week ended April 25, the Labor Department said. While that was down from 4.442 million in the prior week and marked the fourth straight weekly drop in applications, the numbers are still at levels unimaginable just months ago. Economists polled by Reuters had expected 3.50 million claims in the latest week.

Applications for jobless benefits hit a record 6.867 million in the week ended March 28. Last week’s filings lifted the number of people who sought unemployment benefits to 30.3 million since March 21, equivalent to nearly one out of every five workers losing their job in just over a month. At least 10 million people who have filed claims are still to get benefits.

“The first wave was dominated by displaced leisure and hospitality workers, workers at doctor and dentist offices and administrative positions in general,” said Mark Vitner, a senior economist at Wells Fargo Securities in Charlotte, North Carolina. “A larger portion of more recent job losses have likely been in manufacturing, logistics and professional services.”

Stocks on Wall Street were trading lower. The dollar fell against a basket of currencies, while U.S. Treasury prices rose.

FILE PHOTO: People who lost their jobs wait in line to file for unemployment following an outbreak of the coronavirus disease (COVID-19), at an Arkansas Workforce Center in Fort Smith, Arkansas, U.S. April 6, 2020. REUTERS/Nick Oxford

SKY-ROCKETING UNEMPLOYMENT

The claims report also showed the number of people receiving benefits after an initial week of aid surged 2.174 million to 17.992 million in the week ended April 18.

The so-called continuing claims data is reported with a one-week lag and will be closely watched in the coming months to get a better sense of the depth of the labor market downturn. Continuing claims peaked at 6.6 million in the last recession.

The continuing claims data covered the period during which the government surveyed households for April’s unemployment rate. At face value, the ballooning joblessness rolls imply a jump in the unemployment rate to above 15% in April.

Economists, however, say this is unlikely due to the nature of job losses during the lockdowns. The government has allowed people temporarily unemployed for reasons related to COVID-19 to file for jobless benefits.

This includes those quarantined with the expectation of returning to work, as well as people leaving employment due to a risk of exposure or infection or to care for a family member.

However, according to the Labor Department’s Bureau of Labor Statistics, which compiles the closely watched monthly employment report, a person is defined as unemployed if they do not have a job and have actively looked for work in the past four weeks, and currently are available for work.

“That means many workers who lose their job as a result of the virus will be counted as dropping out of the labor force instead of as unemployed,” said Heidi Shierholz, a former chief economist at the Labor Department, and now head of policy at the Economic Policy Institute in Washington.

Still, economists expect the jobless rate in April will shatter the post-World War Two record of 10.8% touched in November 1982. In March the jobless rate shot up 0.9 percentage point, the largest monthly change since January 1975, to 4.4%.

The government will publish April’s employment report next Friday.

In a separate report on Thursday, the Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, slumped by a record 7.5% last month.

Spending was ironically depressed by a plunge in outlays on healthcare as dental offices closed and hospitals postponed elective surgeries and non-emergency visits to focus on patients suffering from COVID-19. Spending increased 0.2% in February.

Monthly inflation was subdued in March, with the personal consumption expenditures (PCE) price index excluding the volatile food and energy components dipping 0.1%.

That was the weakest reading since March 2017 and followed a 0.2% gain in February. In the 12 months through March, the so-called core PCE price index increased 1.7% after rising 1.8% in February. The core PCE index is the Federal Reserve’s preferred inflation measure for the U.S. central bank’s 2% target.

When adjusted for inflation, consumer spending plunged a record 7.3% in March, setting consumption on a sharply lower path heading into the second quarter. Economists are predicting a record collapse in consumer spending, with estimates for the decline in GDP ranging from a 20% rate to a 40% pace.

The economy contracted at a 4.8% annualized rate in the first quarter, the steepest pace of contraction in GDP since the fourth quarter of 2008, after expanding at a 2.1% rate in the fourth quarter. Consumer spending tumbled at a 7.6% rate, the sharpest drop since the second quarter of 1980, after growing at a 1.8% pace in the October-December period.

Personal income plummeted 2.0% in March, the most since January 2013, reflecting decreases in compensation.

Americans who are still employed stashed away cash, boosting the saving rate to 13.1%, the highest since November 1981, from 8.0% in February.