Over 2.1M Americans filed for unemployment last week, pushing total job losses to 40M
More than 2.1 million laid-off workers applied for unemployment last week, the Labor Department reported on Thursday, as the coronavirus pandemic, and the ensuing economic lockdown, continued to wreak havoc on the jobs market.
Economists surveyed by Refinitiv had forecast 2.1 million.
The new report, which covers the week ending May 23, pushes the 10-week total of losses since states directed residents to stay at home and forced nonessential businesses to close to 40 million, a rate of unemployment unseen since the Great Depression.
Still, although the number of workers seeking assistance remains significantly higher than it did before the coronavirus lockdown began — it’s the 10th straight week that layoffs were counted in the millions — it’s the lowest amount of jobless claims since the week ended March 15.
It marks the eighth week in a row of declining jobless claims since the peak of 6.9 million the week ended March 25. Last week’s total was revised up by 8,000 to 2.44 million.
The four-week moving average was 22.7 million, an increase of 760,250 from the previous week.
While the jobless claims appear to be plateauing, some economists have suggested that a significant part of the American workforce could see prolonged unemployment. The Congressional Budget Office, a nonpartisan body, issued a bleak report last week suggesting that unemployment could remain as high as 8.6 percent at the end of 2021.
“Although initial claims are declining, the pace may only be plateauing,” said Daniel Zhao, senior economist at Glassdoor. “If [unemployment] claims remain in the millions for the next few weeks, it may signal that relaxed state-mandated restrictions alone aren’t enough to staunch the flow of unemployed Americans.”
That projection echoes comments from Federal Reserve Chairman Jerome Powell that the economy’s recovery from the outbreak of the virus could stretch through the end of 2021 and may hinge on the completion of a successful vaccine.
“I would say though we’re not going to get back to where we were quickly. We won’t get back to where we were by the end of the year. That’s unlikely to happen,” the U.S. central bank chief said during a “60 Minutes” interview. He added: “For the economy to fully recover, people will have to be fully confident. And that may have to await the arrival of a vaccine.”
Even as states begin to navigate reopening their economies, some businesses have reported complications in luring workers back to their jobs — in part because of the extra $600-a-week in unemployment benefits.
In its region-by-region roundup of anecdotal information released on Wednesday, the Fed noted the sweetened benefits had created a challenge in bringing employees back for some businesses.
“Contacts cited challenges in bringing employees back to work, including workers’ health concerns, limited access to childcare, and generous unemployment insurance benefits,” the report said.
House Democrats passed a $3 trillion economic-relief plan two weeks ago that would have extended the additional jobless money through the end of January; however, Senate Republicans have declared the bill dead on arrival.