A record 6.6 million Americans applied for unemployment benefits last week as job losses rose sharply due to the coronavirus pandemic.

A report on Thursday from the Labour Department showed that job cuts are mounting against the backdrop of economies around the world sinking into a severe recession.

The figure for last week is much higher than the previous record of 3.3 million reported for the previous week.

The surging lay-offs have led many economists to envision as many as 20 million lost jobs by the end of April.

The unemployment rate could spike to as high as 15% this month, above the previous record of 10.8% set during a deep recession in 1982.

Many employers are slashing their payrolls to try to stay afloat because their revenue has collapsed, especially at restaurants, hotels, gyms, movie cinemas and other venues that depend on face-to-face interaction. Care sales have sunk and factories have closed.

Stay-at-home orders, imposed by most US states, have intensified pressure on businesses, most of which face rent, loans and other bills that must be paid.

Congress significantly expanded the unemployment benefits system in last week’s 2.2 trillion dollar economic rescue package.

That legislation added 600 dollars a week in jobless aid, on top of what recipients receive from their states. This will enable many lower-income workers to manage their expenses and even increase their purchasing power and support the economy.

It also makes many more people eligible for jobless aid, including the self-employed, contractors, and so-called “gig economy” workers such as Uber and Lyft drivers.

Kathryn Lickteig, a cook in Kansas City, signed up for unemployment compensation last week after the city shut down dine-in restaurants. She is hopeful that the extra 600 dollars will help her ride out the shutdown instead of having to look for an interim job.

“It has eased my mind so much,” she said. “I do not have to actively go out and expose myself to the public and possibly get sick. I can stay home now and do my part in social distancing.”

The legislation will also help fund unemployment benefits for workers whose hours have been cut. That would enable these people to replace some of their lost income with unemployment aid even as they keep their jobs.

About 26 states allow workers with reduced hours to claim benefits. Most economists support doing so because it encourages companies to cut back on hours rather than lay off workers.

Mark Zandi, chief economist at Moody’s Analytics, said this week that just 6% of companies surveyed by Moody’s say they are hiring – down dramatically from 40% in the weeks preceding the coronavirus outbreak.

The plunge in hiring underscores the difficulty that anyone out of work would have finding a new job.