USA TODAY International Edition
Almost 46 million jobless even as states reopen
Latest unemployment data could suggest a stall in an economy struggling to recover.
For the first time in nearly three months, a closely watched gauge of layoffs barely declined last week, raising concerns about how swiftly the labor market will improve amid the coronavirus pandemic even as many states reopen their economies.
About 1.5 million workers filed applications for unemployment insurance for the first time last week, the Labor Department said Thursday. That pushes the running tally of those who have made initial claims over the past 13 weeks to a mind- boggling 45.7 million.
Economists surveyed by Bloomberg had estimated that 1.3 million people filed initial claims last week.
The count of 1.5 million is down from 1.57 million the prior week and marks the 11th straight weekly decline since first- time claims peaked at 6.9 million at the end of March. Last week’s drop, however, was by far the slightest since that streak began, and firsttime claims edged down by just 58,000.
One explanation is that layoffs have spread from the travel, restaurant and retail industries that have been hit hardest to sectors such as administration, education, manufacturing and professional services. The weekly tallies remain far higher than the previous record of 695,000 initial unemployment claims during a deep recession in October 1982.
“These are disappointing numbers and serve to emphasize that a full recovery is going to take a long time,” says economist Ian Shepherdson of Pantheon Macroeconomics. Another reason initial claims remain high is that many states continue to work through a large backlog, according to Contingent Macro Resources. Many unemployed Americans have been unable to file first- time claims because of swamped phone and computer systems.
Continuing claims, which represent all Americans still receiving benefits with a one- week lag, fell modestly by 62,000 to 20.5 million the week ending June 6. As states increasingly reopen their economies, that figure is becoming more significant because it reflects all those still unemployed and accounts for people who have returned to work.
The number has been volatile in part because the unemployed are required to file claims in California and Florida every two weeks, but it generally has trended down. Excluding California and Florida, continuing claims would have decreased by a more substantial 200,000 on a non- seasonally adjusted basis.
Last week, the number of initial claims fell by 26,000 in Florida, which has aggressively reopened its economy. The count dropped by 21,000 in Oklahoma, 19,000 in Maryland and 15,000 in Massachusetts. Totals rose by 4,200 in Texas, 3,600 in Nevada and 2,000 in Indiana. “While we do not want to read too much into any one report, the data raise the risk that the improvement in labor market conditions may be stalling out,” Barclays wrote in a research note.
An additional 760,000 people filed initial claims under a separate program that expands eligibility to the self- employed and independent contractors, among others, during the crisis. About
“These are disappointing numbers and serve to emphasize that a full recovery is going to take a long time.”
Ian Shepherdson
Economist, Pantheon Macroeconomics
9.3 million Americans were already receiving unemployment checks under that program, known as Pandemic Unemployment Assistance.
The latest claims totals will figure into the June employment report, which should reveal another month of strong job gains as the economy slowly awakens from an unprecedented deep freeze. About 2.5 million jobs were added in May after 22 million were shed the prior two months, indicating the recovery from the coronavirus- induced pandemic began a month earlier than anticipated as states started allowing many businesses shuttered by the crisis to reopen.
Damage from the pandemic is likely to linger. Top economists predict that about half the lost jobs will be recovered during the second half of 2020 and that unemployment will remain elevated at about 10% by year’s end.