More than 3.8 million laid-off workers applied for unemployment benefits last week as the U.S. economy slid further into a crisis that is becoming the most devastating since the 1930s.

Roughly 30.3 million people have now filed for jobless aid in the six weeks since the coronavirus outbreak began, forcing millions of employers to close their doors and slash their workforces. That is more people than live in the New York and Chicago metropolitan areas combined, and it’s by far the worst string of layoffs on record. It adds up to more than one in six American workers.

With more employers cutting payrolls to save money, economists have forecast that the unemployment rate for April could go as high as 20%. That would be the highest rate since it reached 25% during the Great Depression.

The Labor Department's weekly jobless claims report Thursday came just a day after the Commerce Department released grim news about the economy: Economic output shrank at a 4.8% annual rate in the first three months of the year – the worst showing since the Great Recession struck near the end of 2008. The economic picture is expected to grow ever darker, with the economy forecast to contract at a shocking 30% to 40% annual rate in the April-June quarter. The Congressional Budget Office has estimated that GDP will plunge this quarter at a 40% annual rate.

That would be, by a breathtaking margin, the bleakest quarter since such records were first compiled in 1947. It would be four times the size of the worst quarterly contraction on record, set in 1958.

Initial claims for state unemployment benefits totaled a seasonally adjusted 3.84 million for the week ended April 25, the government said. That was down from 4.442 million in the prior week but the numbers are still high 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 6.87 million in the week ended March 28.

"As these claims are processed, there could even be a sharp drop in initial filings," said Andrew Hollenhorst, an economist at Citigroup in New York. "Still, job separations will likely remain high for a while, as softer demand spills over into industries not initially directly affected by shutdowns."

The Economic Policy Institute has calculated that about 70% of people who have filed for unemployment benefits since the virus struck have been approved. Applications from the rest may still be pending, or they might have been turned down. Some applicants may not have earned enough money in their previous jobs to qualify for unemployment benefits.

Thursday’s figures also showed that states have approved the benefit applications of nearly 18 million people. This figure is much lower than the total number of people who have sought unemployment aid since the virus struck, in part because it lags behind by one week. And not everyone who applies for benefits manages to receive them.

Americans’ confidence in the economy and in their future incomes has plunged, a sentiment that could slow the rebound once more states and cities allow businesses to open. Many consumers, whose spending drives the bulk of the economy, may be slow to begin shopping, traveling and eating out. Some will likely remain too fearful of contracting the virus. And local and state officials are likely to maintain limits on the number of people who can congregate in certain places at any one time.

Consumer confidence, as measured by the Conference Board, has plummeted to a six-year low, and its measure of how Americans regard the current economy fell by a record amount.

Nearly a fifth of Americans expect their incomes to fall in the next six months, the Conference Board found, the worst such reading in more than seven years. That reinforced the belief that Americans will remain cautious in the spending for months to come.

Focus on unemployment rate

At face value, the ballooning joblessness rolls imply a jump in the unemployment rate up to 20% in April.

Economists, however, say this 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.

"Someone who lost their job but is not actively seeking work because the virus makes job search impossible will not be counted as unemployed," said Heidi Shierholz, a former chief economist at the Labor Department.

"A person who lost their job because they have to care for a child whose school or day care closed would not be counted as unemployed because they are not available to work," added Shierholz, now head of policy at the Economic Policy Institute in Washington.

These workers would be counted as dropping out of the labor force, which would lower the unemployment rate. Still, economists expect the jobless rate in April will shatter the post-World War II record of 10.8% touched in November 1982. In March the jobless rate shot up a 0.9 percentage point, the largest monthly change since January 1975, to 4.4%. The government will publish April's employment report next Friday.

Continuing claims are expected to plateau in the weeks ahead as more small businesses access their portion of an almost $3 trillion fiscal package, which made provisions for them to get loans that could be partially forgiven if they were used for employee salaries. A reopening of economies and easing of travel restrictions by some states could trim the unemployment rolls.

Some companies like Walmart and Amazon are hiring workers to meet the huge demand for online shopping. There is also demand for truck drivers as well as workers at pharmacies, supermarkets and courier companies.

"The peak in unemployment will come in April or May, followed by declines beginning in June as economic reopening plays out. For small business loans to be forgiven, employers will need to rehire by late June," said Citigroup's Hollenhorst. "Enhanced unemployment benefits stretch through late July. The timing of these policies suggest there may be a surge of hiring into the later months of the summer."