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1.9M workers file jobless claims as layoffs persist

1.9M workers file jobless claims as layoffs persist


1.9M workers file jobless claims as layoffs persist

Paul Davidson
USA TODAYPublished 9:46 AM EDT Jun 4, 2020About 1.9 million Americans filed initial unemployment benefit claims last week, underscoring that even as all 50 states begin reopening their economies, the damage from the coronavirus pandemic continues to mount.Over the past 11 weeks, 42.6 million workers have sought jobless benefits as states shut down nonessential businesses to curtail the spread of the virus, Labor Department data shows. The figure provides the best measure of layoffs across the U.S.Economists surveyed by Bloomberg estimated that 1.8 million unemployment claims were filed last week.The latest total was below the prior week’s 2.1 million, marking the ninth straight weekly decline after the tally peaked at 6.9 million in late March.If the trend continues, the count likely will dip below a million by early July, says economist Ian Shepherdson of Pantheon Macroeconomics.Mildly disappointing: The number of Americans filing continuing jobless claims — which includes all those receiving benefits, with a one-week lag – rose by 649,000 to 21.5 million during the week ending May 23. That suggests more people were laid off than returned to work even as states start letting businesses reopen. In the previous week, continuing claims fell sharply by about four million to 20.8 million, signaling that more people came off the unemployment rolls than joined. There’s a caveat, however. The drop in continuing claims that prior week was largely driven by a 1.4 million decline in California and a 1.6 million decrease in Florida.  Both states require the unemployed to file claims every two weeks, and that was an off week. As a result, economists anticipated a rise in total U.S. claims as residents in the two states resumed filing.Still, all other states reported just a 46,000 drop in continuing claims following a fall of one million the prior week, according to an analysis by Pantheon.Despite the increase, total continuing claims are still down significantly from earlier this month, underscoring that many Americans are going back to work.“The trend is moving in the right direction,” Shepherdson says.On Friday, Labor is forecast to report eight million net job losses – which includes job cuts and new hiring – in May and an unemployment rate that jumped to an unthinkable 19.5% from 14.7% the prior month. Put simply, the casualties are expected to be only somewhat less dire than April’s employment report, which featured a record 20.5 million payroll losses and an unemployment rate that shot up from 4.4% in March.The jobless claims recorded Thursday will figure into the June jobs report, which some economists say could represent a turning point in the coronavirus crisis.  With all states letting nonessential businesses reopen in phases, economist Gus Faucher of PNC Financial Services Group believes job gains will likely resume in June after two months of historic losses. Shepherdson believes payrolls this month could rise by about two million if continuing claims fall briskly in coming weeks.Yet the pain could linger. Many businesses are expected to shutter permanently, and Moody’s Analytics estimates that only about half of the workers laid off during the crisis will be rehired, leaving unemployment at about 10% throughout 2021.Last week, 83,000 people filed initial claims in New York, a decline of 106,000 from the prior week. The total fell by 24,000 in Michigan to 41,000; by 16,500 in Pennsylvania to 50,000; and by 14,500 in Washington to 35,000.Yet first-time claims rose by 27,000 in California to 230,000 and by 31,000 in Florida to 206,000.An additional 623,000 people filed for benefits under a separate program that expands eligibility to the self-employed and independent contractors, among others, during the crisis. About 10.7 million Americans were already receiving unemployment paychecks under that program, known as Pandemic Unemployment Assistance.

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