US layoffs exceed 40 million but some are returning to work
THE NUMBER of workers filing for jobless benefits since the coronavirus arrived in the United States passed 40 million on Thursday while manufactured goods sales plunged even as signs emerged that people are returning to work.
Job losses on that scale have not been seen since the Great Depression early in the last century, and came as a new data showed the world’s largest economy shrinking by 5.0 per cent in the first quarter, a preview of much worse to come amid the Covid-19 recession.
The pace of layoffs passed their peak but continue in massive numbers, with the Labor Department reporting another 2.12 million workers making new claims for unemployment benefits in the week ended May 23.
The scale dwarfs even the worst week of the global financial crisis 12 years ago but is a decrease from the 2.44 million people who filed in the prior week.zAnd the number of people actually receiving benefits dropped by 3.86 million in the week ended May 16, the first decline since the pandemic’s arrival and an indication that some people may be returning to work.
Even so there are more than 21 million people relying on government payments, up from 1.7 million in the same week of 2019.
The White House Council of Economic Advisers said on Twitter the decline “suggests a substantial flow from unemployment to employment.”
If sustained, it would be a positive development for President Donald Trump, who has cheered on states’ efforts to reopen as he faces a November re-election battle in which the health of the economy is set to weigh heavily on voters’ minds.
But Labor Secretary Eugene Scalia acknowledged the national unemployment rate could hit 20 per cent.
“We do have to, again, acknowledge that this is a challenging time for workers across the country. But we are reopening,” Scalia said on Fox Business Network.
Florida is one of the states moving most aggressively to resume business, and posted one of the largest declines in the insured rate.
California also saw a large decline, but Ian Shepherdson of Pantheon Macroeconomics said that was a technicality as unemployed workers in the state were not required to file for benefits in the latest week.
But he nonetheless expects weekly claims to drop below one million by the end of June and slow over the coming weeks.