The United States filings for unemployment insurance claims accounted for 1.877 million last week showing that the worst is over for the COVID-related jobs crisis. However, that doesn’t mean the level of unemployment still isn’t extremely high. Economists surveyed by Dow Jones had been monitoring 1.775 million new claims. The Labor Department’s total nonetheless represented a decrease from the last weekly jobless claims total of 2.126 million. Filings under the Pandemic Unemployment Assistance program accounted for 623,073 claims.
This was the first time the government’s weekly jobless claims report came under 2 million since the week ended March 14.
Daniel Zhao, senior economist at job placement site Glassdoor stated:
“Even as states reopen, claims in the millions are an indicator that the economic pain of the COVID-19 crisis is still acute.”
Continuing claims, which provide a more transparent (and more accurate) picture of the number of Americans who remain unemployed, totaled 21.5 million. That represents a rise of 649,000 during the last week and it is also worse than Wall Street’s estimations.
Waiting for Nonfarm Payrolls Report
The insured unemployment rate, which represents a measure of those collecting benefits compared with the total labor force, rose 0.5 percentage points to 14.8%.
The numbers came the day before the Labor Department releases its nonfarm payrolls report for May. Economists surveyed by Dow Jones are expecting a decline of 8.3 million and a 20.5% unemployment rate, which is more than two times the highest previous level since the Great Depression.
As states begin to reopen their businesses, that were pretty much shuttered due to coronavirus pandemic, signs grown for an economic crisis likely to drive the unemployment rate to about 20% for May. Over 42.6 million U.S. citizens have filed jobless claims since the closures began in mid-March.
A day before the jobless claims report, ADP’s private payrolls report on Wednesday showed a decline of 2.76 million positions in May. While this seems to be still pretty much higher than anything the U.S. economy even could expect in the pre-coronavirus era, it was still off Wall Street expectations of an 8.75 million decline.
If COVID-19 Recession Is Over, Will U.S. Weekly Jobless Claims Start Falling?
Though Moody’s Analytics economist Mark Zandi declared that “the Covid-19 recession is over”, there can be other opinions in current circumstances. Be it as it may, some analysts have been monitoring mostly the jobless claims number not adjusted for seasonal factors, which are less in play with the unusual nature of the coronavirus-related layoffs. That number amounted 1.603 million, that represents a fall of 314,604 from the previous week.
At the state level, New York showed the most glaring change, falling 106,106 from a week ago, according to unadjusted numbers. Michigan declined by 23,539 and Texas saw a decrease of 20,896. Significant gains came from Florida (31,083) and California (27,199).
After the data was revealed, the stock market began its day of trading in the red. Together with the ongoing riots that are happening throughout the country, still, big unemployment brought all indices into fall.
The Dow Jones (INDEXDJX: .DJI) went down by 0.30% at the open while the Nasdaq Composite (INDEXNASDAQ: .IXIC) fell by 0.21%. The S&P 500 (INDEXSP: .INX) declined 0.34%. At the moment of writing, Dow is 0.33% up, Nasdaq Composite rises 0.29% and S&P 500 goes up by 0.16%.
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