Record number of Americans apply for unemployment benefits
A record 26-million Americans have sought unemployment benefits over the past five weeks, confirming that all the jobs created during the longest employment boom in US history were wiped out in about a month, as the novel coronavirus savages the US economy.
The labour department said on Thursday that 4.427-million more people applied for unemployment benefits for the first time last week, down from a revised 5.237-million the week before. The median expectation among economists in a Reuters poll was for claims to have fallen to 4.2-million last week, although estimates had ranged as high as 5.5-million.
The latest data brings the cumulative unemployment benefits claims to more than 26million since the week ending
March 21, representing about 16% of the labour force. The economy created 22-million jobs during the employment boom that started in September 2010 and abruptly ended in February 2020.
Though weekly jobless filings remain very high, last week’s data marked the third straight weekly decline, raising hopes that the worst may be over. Weekly claims appeared to have peaked at a record 6.867-million in the week ended March 28.
Nonetheless, the report adds to a growing pile of increasingly bleak economic data. It also comes amid rising protests against nationwide lockdowns.
President Donald Trump, who is seeking a second term in the White House in November’s general election, has been anxious to restart the paralysed economy. On Wednesday, Trump applauded steps taken by a handful of Republican-led states to begin reopening their economies, despite warnings from health experts of a potential new surge in infections.
“The US economy is haemorrhaging jobs at a pace and scale never before recorded,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “It compares to a natural disaster on a national scale.”
Last week’s claims report covered the period during which the government surveyed business establishments for the nonfarm payrolls component of April’s employment report.
Economists are forecasting as many as 25-million jobs were lost in April after the economy purged 701,000 positions in March, which was the largest decline in 11 years. The labour market slaughter adds to collapsing oil prices, retail sales, manufacturing production, homebuilding and home sales in reinforcing economists’ contention that the economy entered recession in March.
The National Bureau of Economic Research, the private research institute regarded as the arbiter of US recessions, does not define a recession as two consecutive quarters of decline in real GDP, as is the rule of thumb in many countries. Instead, it looks for a drop in activity, spread across the economy and lasting more than a few months.
However, a few companies have decided to get back to business. Taylor Wimpey, one of the UK’s biggest home builders, said on Wednesday it will start work on its construction sites on April 27, while luxury vehicle maker Aston Martin will restart production in May.
Some Conservatives urged the government to look at the example from other countries, such as Germany, Denmark, Switzerland and Austria, which have opened smaller shops and some schools.
What “we want to see is the economy being reopened as far as possible, as soon as possible, without risking an overwhelming epidemic,” Tory MP Peter Bone said. “We are seeing some countries around the world managing to do this because they are further on in the virus than we are. That’s quite helpful for us because if they are opening small shops, and it’s not having an adverse effect, then the logic is we can do that.”
Other Conservatives were more measured. Tory MP Mark Garnier said he was not so much concerned about the duration of the lockdown, but some, such as agency workers and the selfemployed, not getting adequate financial support.