Initial claims in U.S. slowly decline as millions remain jobless

According to the latest unemployment data released by the Department of Labour, the number of Americans newly applying for unemployment benefits decreased to 1,480,000 in the week ending June 21.

While the latest drop in initial claims marks the 12th consecutive week of declines, the number of weekly unemployment claims is still historically high. Prior to the COVID-19 pandemic, weekly claims had peaked at 695,000 in the fall of 1982, putting this week’s “positive” news in perspective.

As our chart shows, weekly unemployment claims have trended downwards since hitting 6.9 million in late March, but remain far above the levels seen before the pandemic hit. Also the pace of decline appears to be levelling out as jobless claims have been hovering around 1.5 million for three weeks now.

The number of people receiving unemployment benefits also saw a slight decline in the week ended June 13, but with almost 20 million people still out of work, the jobs crisis is far from over.

When asked about his expectation of how many of the latest job losses will turn out permanent in a FOMC press conference earlier this month, Federal Reserve Chairman

Jerome Powell said that it “could be well into the millions of people who don’t get to go back to their old job,” and that

“it could be some years before we get back to those people finding jobs.” (Statista)