In the latest measure of the devastating and unprecedented economic consequences of the coronavirus pandemic, weekly unemployment claims in Nevada last week continued to surge by the tens of thousands with 79,865 new initial claims, according to preliminary statistics from the U.S. Department of Labor released Thursday.
Combined with nearly 72,000 new claims last week and more than 92,000 new claims the week before, a quarter of a million Nevadans — roughly 244,000 — are now out of work.
As a percentage of the state’s jobs measured at the end of February, more than 1.4 million workers, it translates to 16.8 percent of Nevada’s workforce — nearly seven points higher than preliminary national projections of about 10 percent.
The statistics for the first week of April continued a trend with no historical analogue; unemployment during the depths of the financial crisis that began in 2008 peaked in Nevada at 13.7 percent, and never before have so many unemployment claims been filed in such a short period of time.
The volume of claims quickly overwhelmed the limited capacity of the state’s unemployment system, which has been plagued by lengthy wait times and maxed-out phone lines.
Much of the economic damage has stemmed from widespread closures of businesses in the bid to mitigate the spread of COVID-19. That included early closures last month of most hospitality and service-related industries, devastating Nevada’s tourism-driven economy and turning the vaunted Las Vegas Strip into a modern day ghost town.
State, local and federal officials have scrambled to contain the economic damage. The Trump Administration has seemed eager to normalize the economy as soon as it can, with Treasury Secretary Steven Mnuchin saying Thursday he believed businesses could reopen as early as May.
Amid those plans, the Federal Reserve announced Thursday it would ramp up relief efforts, seeking to pump $2.3 trillion into the economy through the purchase of municipal bonds and riskier debt.
Two relief packages passed by Congress last month have sought to limit the damage even further, expanding unemployment insurance benefits and small business loans as part of a $2 trillion coronavirus response measure.
Meanwhile, state officials have looked to kick looming bills for rent, utilities and other necessities down the road, hoping to provide a few months of reprieve during the worst of the pandemic.
But as unemployment claims continue to skyrocket — with more than 6.6 million claims filed nationwide last week and more than 16 million over the last three weeks — concerns remain that the government’s response may not be enough.
Those concerns have become especially acute as health officials across the country remain worried that — even though it appears the spread of the virus may now be slowing — a surge in cases could still occur if social distancing measures are relaxed too quickly.
In Nevada, preparations are already being made to drastically cut back budgets. Gov. Steve Sisolak last week requested preliminary budgets from all state agencies with cuts of 4 percent for the 2020 fiscal year, and several scenarios for 6, 10 and 14 percent cuts for the 2021 fiscal year.
In the meantime, the state’s Interim Finance Committee approved $6.2 million in emergency aid money to help bolster the state’s response to the virus and allow access to federal emergency relief dollars. That money may only be a start, however, and the state’s Emergency Management head Justin Luna told lawmakers that the ultimate cost “may be much higher.”
As tax revenues continue to dry up, local governments are also bracing for drastic reductions. Officials in the City of Reno are preparing to cover a budget hole as large as $30 million, while preliminary shortfall estimates in Las Vegas were as high as $100 million.
The crisis has also complicated Gov. Steve Sisolak’s decision to close some businesses and keep others open. During a press briefing Wednesday, Sisolak said his decision to keep construction, mining and manufacturing industries open — even as some sites within those industries report cases of COVID-19 — has largely been an economic choice.
“Right now I’ve got a quarter of a million people that file for unemployment,” Sisolak said. “I don’t want another 100,000 or more filing for unemployment, if I can avoid it.”