New unemployment claims in Oregon jumped by nearly 3,200% Tuesday amid wholesale layoffs triggered by the coronavirus outbreak.

An Oregon business leader predicted the state’s unemployment rate could rise as high as 20% in the coming months as the economic catastrophe deepens, a rate that implies nearly 500,000 people would be looking for work. State economists say a recession is all but certain.

Wednesday night’s numbers from the Oregon Employment Department are the first hard data on the depth of the state’s economic crisis. On Tuesday alone, 18,500 people filed jobless claims – up from an average of 570 new claims a day in the preceding four weeks.

The numbers out Wednesday from the Oregon Employment Department are alarming but they’re not surprising. After Gov. Kate Brown ordered restaurants and bars closed Monday, part of a desperate effort to contain the coronavirus, the state’s restaurant and lodging began laying off an entire sector of Oregon’s economy that previously employed 155,000.

Oregon’s record was nearly 21,000 for an entire week during the worst is the Great Recession. We will blow through that this week. Question is how many weeks like this will we see? https://t.co/ov8geXtACh — Josh Mahomes II (@lehnerjw) March 19, 2020

And many retailers, from Apple to Nike to Powell’s Books, have closed their stores to reduce the chances of exposure. On Tuesday, the McMenamins chain of hotels and restaurants laid off 3,000 workers – “almost everyone,” the iconic Oregon company said.

“Our economy has already been hit, and hard,” Elana Pirtle-Guiney, Brown’s legislative director, told a special coronavirus committee hearing in Salem on Wednesday.

Walter Renderos, 51, lost his job last week working for a shipping company that serves Europe, one of 15 who lost his job. He said this week he’s looking for any kind of assistance.

“My big concern is how I’m going to buy food, how I’m going to pay my bills, how I’m going to pay my rent,” Renderos said.

Lawmakers and worker advocates called for changes to the unemployment system to speed aid to workers, extend the length of their benefits (they typically last for 26 weeks) and provide aid to businesses so they can keep workers employed.

The state’s unemployment claims system was overwhelmed and offline for much of Monday and Tuesday. But the Employment Department performed system maintenance overnight and the website appeared to be working normally Wednesday.

Also Wednesday, the department enacted new rules to give employers more flexibility on providing unemployment benefits to workers who lost their jobs to the outbreak. The department doesn’t yet have figures for last week’s new jobless claims, or Monday’s total.

“This is a broad crisis that’s affecting every community, every industry and businesses of all sizes,” Sandra McDonough, CEO of Oregon Business and Industry, told Wednesday’s legislative hearing.

Oregon’s jobless rate was just 3.3% last month after a decade of economic growth. McDonough predicted it could rise to 20% as the coronavirus’ economic contagion spreads to more industries as whole industries freeze up and businesses and workers shut their wallets.

During the Great Recession, Oregon’s unemployment rate peaked at 11.9%. So this catastrophe has the potential to be much worse.

“I have never seen the level of concern I’m hearing everyday from businesses all over Oregon,” McDonough said. They’re worried not just about the vitality of their businesses but about the well-being of their employees, their customers and their ability to protect jobs over the long term.”

-- Mike Rogoway | mrogoway@oregonian.com | twitter: @rogoway | 503-294-7699

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