Million Jobless Claims Resulted in Monthly Loss up to 22M

With 5.245 million additional Americans filing first-time claims for unemployment insurance the previous week, protection measures against the coronavirus further tear through the employment ranks.

As a result, that brings the crisis total to more than 22 million, almost wiping out every job gained since the Great Recession. And the total was somehow worse than the 5 million expected from economists surveyed by Dow Jones.

In the most recent count for the week ended on April 11, it represented a fall from the past two weeks. And it displayed that the damage to the U.S. labor market stays profound.

Chief investment officer at the Bleakley Group, Peter Boockvar, stated, “as we fully know the current state of the labor market with mass waves of layoffs, the key question turns to how many of these people will be rehired when the economy starts to reopen.”

He also assumes that it might take a long time for that to occur. But Boockvar is hoping that they are becoming closer to getting started.

Unadjusted Claims Fall

They slightly revised up the initial total of 6.606 million last week to 6.615 million.

The four-week moving average during regular times helps ease out weekly volatility in the numbers. And now, it spiked to 6.066 million, a surge of 2.568 million in the past week. Then, stock market futures gained on the news and pointed to a little gain at the market open.

Still, there a few good news in the data when looking at the numbers not adjusted for seasonal factors. Several economists are saying that this is unnecessary, given the current unusual conditions.

Moreover, the unadjusted total was 4.97 million, representing a dip of 20% or over 1.2 million from the previous week. Notably, seasonal factors should have reflected around 1% gain, based on the Labor Department. A comparable week in 2019 would have displayed only 196,364 claims.

A lot of big states exhibited drops from last week in benefit applications.

Aside from that, Pennsylvania showed a decline of 39,283, California dropped 257, 848, and Michigan was down by 169, 234. On the other hand, New York, which has lagged a dew of the larger states in terms of filing, saw an increase of 52,498 to 395,949.

Employment Rate

Now, the numbers given comes with an unemployment rate of 4.4%. And this does not come close to measuring the damage the COVID-19 has had on the jobs market. A lot of economists expect the jobless level to be in the neighborhood of 10% when the April tally completes. Also, there are forecasts that it might go as high as 15%.

The overall claims of 22.03 million filed since social distancing measures took effect mirrored a 13.5% fall in household employment. According to chief U.S. economist at Capital Economics, Paul Ashworth, he expects the April jobless rate to reach 15% to 20%.

He explained, “We do still expect the unemployment rate to come down much more quickly than during a normal economic recovery, as temporary layoffs return to work once the lockdowns are lifted, so we still wouldn’t characterize this as a depression-type event.”