US jobless claims top 40 million

Washington: Another 2.12 million people filed for unemployment in the United States last week, pushing total layoffs since the start of the coronavirus crisis to more than 40 million, a level not seen since the Great Depression, the Labor Department said.

The new filings, however, showed that the pace of the layoffs was subsiding as the US economy slowly begins to reopen, with the data for the week ended May 23 a decrease from the upwardly revised 2.44 million claims filed the week before. The number of new claims filed weekly still remains well above any single week of the global financial crisis 12 years ago, but there were signs that states´ efforts to bring their economies back online were having an impact.

"The dip in initial claims is consistent with Google search and advance state data, which tentatively point to a bigger drop next week," said Ian Shepherdson of Pantheon Macroeconomics, predicting weekly claims could drop below one million by the end of June.

The insured unemployment rate, measuring the people actually receiving benefits, was at 14.5 percent for the week ended May 16, decreasing for the first time since the pandemic´s arrival and indicating that some people had returned to work.

Florida, one of the states moving most aggressively to reopen, accounted for part of the decrease, but Shepherdson said much of the rest was caused by a technicality in California, which remained under lockdown for the week of the survey. The seasonally adjusted 2.1 million initial claims last week reflected a drop from 2.4 million a week earlier, which was revised slightly higher. On an unadjusted basis, jobless claims dropped to 1.9m from 2.2 million for the week that ended on May 23.

Joshua Shapiro, chief US economist at MFR, noted that while many states were still working through a backlog of unemployment requests, the decline in continuing claims also came as Americans who had sought benefits returned to work. “The path of continuing claims will depend on the speed at which people are re-employed versus the ongoing pace of job losses,” Shapiro said. “Presumably, as the economy continues to open up, re-employment will reasonably soon begin to outpace job losses, and continuing claims will thus start to recede. It is possible that this week’s result is starting to show this.”

In a separate report, the Commerce Department said US GDP fell 5.0 percent in the first three months of the year, slightly worse than the 4.8 percent drop originally reported, putting an end to a decade of economic expansion.