Weekly Jobless Claims Grind Lower but Backlogs, Layoffs Linger
WASHINGTON—Millions more Americans filed for unemployment benefits last week as backlogs in processi..
WASHINGTON—Millions more Americans filed for unemployment benefits last week as backlogs in processing claims continue to be cleared and disruptions from the CCP virus unleash a second wave of layoffs, pointing to another month of staggering job losses in May.
The Labor Departments weekly jobless claims report, the most timely data on the economys health, showed a surge to a record high in the number of people on unemployment rolls, suggested that businesses were probably in no rush to rehire workers as they reopen.
A broad shutdown of the country in mid-March to contain the spread of COVID-19, the respiratory illness caused by the CCP (Chinese Communist Party) virus, commonly known as the novel coronavirus, has resulted in the worst unemployment since the Great Depression.
“The states may be opening back up, but the labor market is still closed for millions across America and the loss of the income and spending of those without jobs will be a considerable headwind for this economic recovery,” said Chris Rupkey, chief economist at MUFG in New York.
Initial claims for state unemployment benefits fell 249,000 to a seasonally adjusted 2.438 million in the week ended May 16, the government said on Thursday. Data for the prior week was revised to show 294,000 fewer applications received than previously reported, bringing down the tally for the week ending May to 2.687 million from 2.981 million. The states of Connecticut said last week it had misreported its numbers.
Last weeks claims reading was in line with economists expectations, and marked the seventh straight weekly decline.
There was some encouraging news. A survey from the Philadelphia Federal Reserve on Thursday showed businesses in the mid-Atlantic region were increasingly optimistic, as the six-month outlook jumped to a 2-1/2 year high in May.
U.S. stock indexes edged lower at the open on China-U.S. tensions and mixed retail earnings. The dollar was little changed against a basket of currencies, while U.S. Treasury prices rose.
Gradual Decline
Claims have been gradually declining since hitting a record 6.867 million in the week ended March 28.
Economists said claims numbers were staying high as states were now processing applications for gig workers and many others trying to access federal governments Pandemic Unemployment Assistance (PUA) program.
These workers generally do not qualify for regular unemployment insurance, but to get federal aid for virus-related job and income losses they must first file for state benefits and be denied.
Last weeks filings lift the number of people who filed claims for unemployment benefits to about 38.6 million since March 21.
Economists caution that this figure did not represent the number of jobs lost due to the pandemic, because of the technical difficulties and procedures at state unemployment offices. They also noted that this number could include people who have since found jobs.
Last weeks claims data covered the week during which the government surveyed establishments for the nonfarm payrolls portion of Mays employment report.
