1.5M more workers seek unemployment benefits
11th straight weekly decline is much smaller than expected
WASHINGTON — About 1.5 million laid-off workers applied for U.S. unemployment benefits last week, a historically high number, even as the economy increasingly reopens and employers bring some people back to work.
The latest figure released Thursday marked the 11th straight weekly decline in applications since they peaked at nearly 7 million in March as the coronavirus shut down much of the economy and caused tens of millions of layoffs. The decline was much smaller, though, than in recent weeks, falling just 58,000.
The total number of people receiving unemployment aid also fell slightly, reflecting the return of many to their old jobs.
Still, analysts had expected a sharper decline in weekly applications, and some expressed disappointment that so many people are still seeking unemployment benefits even as restaurants, gyms and many categories of retail shops are reopening across the country.
“It does seem like there are many new people filing for unemployment, and this is worrisome when we are three months into the crisis and you are starting to see re-openings across the nation,” said Gregory Daco, chief U.S. economist at Oxford Economics.
The jobless claims report generally tracks the pace of layoffs. But it provides little information about how much hiring is occurring that would offset those job losses. In May, employers added 2.5 million jobs — a surprise increase that caught analysts off-guard because the number of applications for unemployment aid was still so high.
Daco said he expects the June jobs report, to be released in early July, to show another increase in hiring. But he said the June figures will be particularly hard to forecast.
Millions of people, Daco noted, have likely been rehired thanks to the government’s small business lending program, which has made about 5 million loans to employers. But the actual number of recovered jobs depends on how many people those businesses actually rehired. And some companies may resort to layoffs again once they spend all their loan money.
Such a huge flow of people in and out of work, and the uncertainty surrounding it, make it hard to track where the job market is headed, Daco said.