Massive U.S. job losses - economy is cratering: Wells Fargo economist
As business reopenings picked up nationwide, Americans filed nearly 2 million applications for unemployment benefits last week, reflecting a slowing -- though far from a halt -- in job losses.
Initial jobless claims for regular state programs totaled 1.88 million in the week ended May 30, Labor Department figures showed Thursday, down from 2.13 million the prior week.
It was the first reading below 2 million since the coronavirus-related layoffs began en masse in mid-March. The median estimate in a Bloomberg survey of economists called for 1.83 million claims in the latest week.
Continuing claims -- the total number of Americans receiving unemployment benefits -- increased to 21.5 million in state programs the week ended May 23, compared with analyst estimates for a decline.
Most states reported declines from the prior week, and the latest increase in part reflects quirks from biweekly filing rules in California, which showed an unadjusted rise of about 618,000.
In the week ended May 30, 36 states reported 623,073 initial claims for Pandemic Unemployment Assistance, the federal program that extends unemployment benefits to those not typically eligible like the self-employed.
Thursday’s report underscores the current dichotomy in the labor market. The layoffs are continuing -- and hitting the higher-wage workers and supervisors that escaped the initial wave of layoffs -- but at the same time, a multitude of Americans have headed back to work with varying degrees of business restrictions being eased in all 50 states.
The initial claims figure remains enormous at about nine times the pre-pandemic weekly average, but weeks of decreasing initial claims suggests the worst of the coronavirus-related layoffs is over.
Even so, lingering effects from forced business closures and the pandemic itself will likely weigh on any recovery in the labor market for some time.
The May jobs report, out Friday, is forecast to show employers cut payrolls by 8 million, sending the unemployment rate soaring to Great Depression-like levels at 19.5 per cent. It will also show the distribution of job losses across industries.
The reference week for the report is in mid-May, so last week’s jobless claims may reflect job losses not captured in the monthly employment report.
--With assistance from Chris Middleton, Edith Moy and Sophie Caronello.