Nearly 22 million Americans have applied for unemployment financial aid in the past 4 weeks

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The drama of the American unemployed 4:13

(CNN Business) - As companies remain closed due to the coronavirus pandemic, a relentless job crisis continues to bring thousands of Americans to unemployment lists.

Another 5.2 million workers in the United States applied for unemployment financial assistance last week, according to the Labor Department. This brings to 22 million the total number of Americans who have filed their initial unemployment claims since March 14. A figure that is approximately 13.5% of the workforce.

• READ: Do you want to apply for unemployment financial assistance offered by the US government? Read this first

Overall, the past four weeks have represented the largest and most dramatic increase in recorded applications since the Department of Labor began tracking information in 1967. The situation is saturating the ability of state unemployment agencies to handle the amount. of applicants, in addition to threatening to run out of unemployment trust funds in some states in the coming weeks.

Other labor crises have developed more slowly. In the Great Recession, for example, employment fell by 8.6 million workers from its peak in November 2007 to its lowest in December 2009.

On this occasion, the mass layoffs and licenses occurred suddenly when states enacted the closings of all businesses, except essential ones, to curb the spread of the coronavirus pandemic.

The country's official unemployment rate - which rose to 4.4% in March after hitting a record low of 3.5% in February - is now expected to hit double digits in April.

"April is sure to be truly shocking," wrote Brian Coulton, chief economist at Fitch Ratings, in comments emailed. He estimates the unemployment rate could skyrocket to about 15% east, a new high after World War II.

During the coronavirus pandemic, layoffs initially affected service jobs the most. Retail, restaurant and hotel workers, for example, were the first to lose their jobs.

Now, as a deep economic recession breaks out, job losses could also begin to affect office and administrative workers.

"As the closings continue, job losses are likely to spread to other areas of the labor market, such as business and professional services, where companies may begin to see lower earnings due to a decline in demand," he said. Robard Williams, Senior Vice President, Moody's Investor Service.

Many economists believe that the increase in unemployment will be temporary and that many - but not all - of the jobs that were lost due to the coronavirus will be recovered when the crisis ends. But ultimately, its forecasts are highly uncertain, and the economic rebound will depend on the course of the virus.

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Until a recovery is established, consumer confidence and spending will also decline.

"Given the huge impact consumers have not only on the United States economy, but also on the global economy, this is going to be tough," said Michael Arone, chief investment strategist at State Street Global Advisors.

A blow to the US unemployment system

Meanwhile, growing demands continue to overwhelm state labor departments. Many agencies are hiring additional workers and rushing to roll out technology updates to accommodate requests.

Initial applications represent first-time requests for unemployment financial assistance, and not all of those applications result in people actually receiving the aid. For the week ending April 4, approximately 12 million Americans were receiving assistance, according to the Labor Department. That number is also at its highest point. In comparison, at the peak of the Great Recession, no more than 6.5 million workers were receiving unemployment benefits at any given time.

Some states are also expected to run out of funds for unemployment financial aid soon.

Six states - including New York, which concentrates the largest number of cases in the US - will only be able to finance up to 10 weeks of financial aid from their state coffers before the money runs out and they have to go to the federal government to obtain funds additional, according to a recent estimate by the Tax Foundation.

In addition, 15 other state trust funds do not meet the minimum solvency level recommended by the Department of Labor, which requires being able to pay unemployment assistance for one year in an economic recession similar to the Great Recession.

Lack of funds will not affect the millions of Americans who are currently applying for or receiving financial aid - they will receive their weekly checks regardless of the state's financial situation.

States continue to be responsible for their share of unemployment insurance, which generally lasts up to 26 weeks. If their trust funds were depleted, they could take out loans from the federal government, but some states could end up paying interest and employers would face higher taxes to cover the debt. Other options they have are to issue bonds or withdraw other state funds, which most states cannot afford as the coronavirus wreaks havoc on tax revenues.

"Most states have relatively few options," said Jared Walczak, director of state fiscal policy for the Tax Foundation. "The states will have to borrow heavily. Ultimately, this will likely lead to higher federal and state taxes on businesses, which states want to avoid as long as possible. ”

But states were not caught by the historic expansion of the recently approved unemployment assistance program in Congress as part of their economic aid package. The federal government is paying the costs of the temporary increase of $ 600 in weekly payments and the short-term expansion of aid for those affected by the coronavirus and independent workers, which is estimated to cost around $ 250 billion.

However, many people and freelancers have said they are struggling to access those benefits, due to delays in processing and systems that were not equipped to handle requests from freelancers.

CNN Business's Clare Duffy contributed to this report.

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