The economy shed 701,000 jobs in March, sending the unemployment rate to its sharpest one-month rise since 1975 and prompting key Democrats to launch talks about a fresh round of government aid to ward off what some economists warn could be a depression.

Just one week after President Trump signed a $2 trillion financial rescue bill — the third legislative response to the coronavirus pandemic and the costliest such effort in U.S. history — the deteriorating labor market has jolted lawmakers to begin planning additional action. House Speaker Nancy Pelosi (D) said Friday that more federal spending is needed for unemployment insurance, small businesses, hospitals and state and municipal governments.

“We can find common ground as we go forward. Let’s do the same bill we just did, make some changes as to make it current and correct some of the things,” she told The Washington Post in a brief interview.

After encountering stiff Republican resistance earlier this week to her call for a mammoth “phase four” bill focused on infrastructure spending, Pelosi now backs a more modest measure some have dubbed “phase 3.5” that would build on previous legislation.

The speaker wants to extend bulked-up unemployment payments to six months from four and provide funds for state governments to handle a crush of applications from the newly jobless. Democrats have also begun talks about sending millions of Americans a second stimulus check, and some White House officials have signaled an openness to the extra measures.

An existing $349 billion small-business loan program, which endured a somewhat chaotic rollout on Friday, “is not going to be enough. We’re just going to have to do that again,” Pelosi said.

Treasury Secretary Steven Mnuchin has said he would seek additional funding from Congress if the small-business loan program, designed to tide companies over until the state-mandated shutdowns end, were exhausted. But publicly, the Trump administration has sent mixed signals about the need for further legislation.

House aides are drafting legislation that could be ready for lawmakers on April 20, when they are scheduled to return to Washington. Asked about Pelosi’s push for early action, National Economic Council Director Larry Kudlow demurred.

“Let’s wait and see. The key right now is executing this package,” he said, referring to the measure the president signed March 27.

A few hours later, during a meeting with energy industry executives, the president said he would be “doing a big package on infrastructure fairly soon,” an idea Senate Majority Leader Mitch McConnell (R) has already rejected as “premature.”

But Trump’s comment showed how both parties have begun planning a spate of new spending measures as signs of the economy’s tumble come into sharper focus.

A senior administration official, who spoke on the condition of anonymity to discuss internal thinking, said the White House would consider a follow-up move along the lines Pelosi discussed.

“If there’s a need for continued help for the American people and our economy, we don’t rule out additional action on a phase 3.5,” the official said.

The political debate is moving quickly, but it is struggling to keep pace with the economic erosion. As the pandemic has forced more and more Americans to stay home, the likely financial toll has mushroomed. On Friday, Bank of America said the economy will shrink this year by almost $1.3 trillion.

Almost two-thirds of the March employment decline — 459,000 jobs — occurred in the leisure and hospitality sector, mainly in restaurants and bars, according to the Labor Department report. But government economists said “notable” job cuts also hit several other sectors, including health care, professional and business services, retail and construction.

From shuttered dentist offices to deserted clothing stores, the coronavirus claimed American jobs. Blue-collar workers were hit hard as manufacturing employment — a top priority for Trump — fell by 18,000 and the construction industry let go of 29,000 employees.

Hispanic workers suffered an especially sharp increase in their jobless rate last month to 6 percent from 4.4 percent.

The losses were the worst since 2009 and ended the economy’s 113-month streak of job growth, but represented only the first signs of the unprecedented damage being inflicted on the labor market. In the past two weeks, 10 million Americans have filed first-time claims for unemployment insurance, the result of mandatory social distancing that is keeping most people from working normally.

Along with the financial hardship hitting millions of American families, the labor market meltdown is also shredding key elements of Trump’s reelection pitch. The president for months has boasted about the economy’s record-long expansion, record-high stock market and half-century low in the unemployment rate.

Now, in little more than one month, all three have been upended by the battle against the coronavirus.

“It bankrupts every one of his reelection themes: the economy, keeping America safe and running against socialism,” said Chris Krueger, a strategist with Cowen Washington Research Group. “It’s hard to think of a more devastating event.”

In recent days, a raft of top U.S. companies have announced layoffs or furloughs, including General Electric, Macy’s, Boeing and Marriott. Even the Trump Organization is laying off workers and temporarily closing some of its properties.

The president and Congress have raced to construct a safety net to prevent the coronavirus-related shutdown from doing permanent economic damage. The financial rescue bill Trump signed a week ago includes $1,200 payments for most Americans, as well as a $454 billion fund to aid battered industries, including the nation’s airlines.

The $349 billion small-business loan program that began taking applications on Friday, however, got off to a rocky start. The Treasury Department released detailed guidance for the nation’s largest banks less than 24 hours before the program went live. Some would-be borrowers have complained about receiving inconsistent or confusing information from their local lenders.

One-quarter of small businesses said they are two months or less from closing permanently, according to a poll by the U.S. Chamber of Commerce and MetLife.

The job losses in March were larger than the 100,000 decline economists had forecast. But investors dismissed Friday’s Labor Department report as outdated, since it was based on a monthly survey that was completed on March 14 — before many state governments ordered the economy to a halt in hopes of disrupting the spread of the sometimes-fatal respiratory illness.

“It’s largely irrelevant in light of what we’re expecting to see in April,” said Gregory Daco, chief U.S. economist for Oxford Economics. “It’s going to be really bad.”

As laid-off workers continue streaming into state unemployment offices, next month’s job losses could reach an astonishing 24 million, Daco said. That would push the total number of jobless Americans to roughly 30 million, nearly twice the total at the 2009 depths of the global financial crisis.

The U.S. economy has endured 11 recessions since World War II, but it has never experienced anything like what is now occurring. Official stay-at-home orders intended to arrest the pandemic are keeping Americans from working and consuming.

“The month of April will have the first depression-magnitude job losses the country has seen since the 1930s,” economist Chris Rupkey of MUFG Union Bank wrote in a research note. “ … The labor market could easily become depression-like very quickly where one out of four of your neighbors is no longer getting a paycheck.”

The Labor Department said it also had revised down its previous estimates of job gains for January and February by a total of 57,000 positions. January’s non-farm payroll employment was cut by 59,000 to 214,000 from an original estimate of 273,000. February’s total was revised up by 2,000 to 275,000 from 273,000.

For workers, the worst is yet to come: By midyear, the nation will likely be suffering its highest unemployment rate in nearly 40 years and possibly the worst since the Great Depression. Bank of America says the jobless rate will hit 15.6 percent. Goldman Sachs pegs it at 15 percent, while the nonpartisan Congressional Budget Office estimates 12 percent for the second quarter.

“This recession is huge and extremely abrupt. … We could be at levels evoking the Great Depression,” said economist Erica Groshen, a former commissioner of the Bureau of Labor Statistics.

The March jobless rate rose 0.9 percentage points from February’s 3.5 percent, the biggest one-month increase since 1975. It is now at its highest mark since August 2017.

And the March rate could have been higher, according to William Beach, commissioner of the Bureau of Labor Statistics, which prepares the monthly employment report. An unusually large number of individuals were recorded as employed but absent from work for “other reasons,” reflecting the impact of coronavirus-related business closures.

If they had been included in the unemployment tally, the 4.4 percent March jobless rate “would have been almost 1 percentage point higher than reported,” Beach said.

Over the past 12 months, the economy has produced an average of 196,000 new jobs each month, along with wage gains that increasingly benefited low-income workers. In March, average hourly earnings for all employees on private sector non-farm payrolls rose by 11 cents to $28.62, which economists said may reflect the changing composition of the labor force as lower-paid workers were culled in the initial layoffs.

But in a matter of weeks, the economy has plummeted from steady growth and abundant job opportunities to dire hardship. The impact is being felt widely. Over the past two weeks, every state in the nation reported its highest-ever initial jobless claim total as the economy shuddered to a sudden stop, according to the Economic Policy Institute.

In a poll by the Kaiser Family Foundation, 39 percent of Americans said they have lost their job, accepted a pay cut or had their hours reduced because of the pandemic.

“We cannot foresee any part of the economy being safe from virus-related shutdowns. Companies whose survival now depends on cutting costs have no choice but to cut payrolls,” economist Rubeela Farooqi of High Frequency Economics wrote Thursday in a note to clients.