Unemployment Level Reached 1.8M, Surpassing Expectations
Filings for unemployment insurance claims reached 1.877 million in the previous week, a hint that the worst is over for the coronavirus-related job crisis. However, the level of unemployment is still stubbornly high.
Furthermore, economists surveyed by Dow Jones had forecast 1.775 million new claims. And the Labor Department’s overall figures nevertheless represented a fall from last week’s upwardly revised total of 2.126 million. Filings under the Pandemic Unemployment Assistance program sum up to 623,073.
Since the week ended on March 14, this would be the first time the government’s weekly jobless claims report came under 2 million.
Senior economist for Job placement site Glassdoor, Daniel Zhao, stated, “Even as states open, claims in the millions are an indicator that the economic pain of the COVID-19 crisis is still acute.”
Now, continuing claims give a more transparent picture of the number of Americans who are still unemployed, totaling 21.5 million. This is a gain of 649,000 during the past week, also worse than Wall Street expected.
The insured unemployment rate is a simple measure of those collecting benefits compared with the overall labor force. It surged up 0.5 percentage points to 14.8%.
In addition to that, the numbers arrived the day before the Labor Department disclosed its nonfarm payrolls report for May. Additionally, economists surveyed by Dow Jones forecast a fall of 8.3 million and a 20.5% unemployment rate. This is more than double the highest previous levels since the Great Depression.
Millions of People
Now, as states started to reopen after being nearly shut down for the better part of three months, so have indications grown for an economic crisis to possibly drive the unemployment rate to roughly 20% for May. Over 42.6 million Americans have filed jobless claims since the shutdown started in mid-March.
A day ahead of the jobless claims report, ADP’s private payrolls report on Wednesday displayed a drop of 2.76 million positions in May. Although it remains far higher compared to anything the U.S. economy saw in the pre-coronavirus era, it was well off Wall Street expectation of an 8.75 million decline.
This led Moody’s Analytics economist, Mark Zandi, to say that the COVID-19 recession is over. Moody’s assists ASP in placing together the monthly private payrolls report. Zandi stated that “That would make it the shortest recession in history.”
He also thinks that it might be among the most severe recessions as well.
Several economists have been focusing their attention on the jobless claims number not adjusted for seasonal factors – which are less in play with the unexpected nature of the coronavirus-related layoffs.
Aside from that, the number totaled 1.603 million, a decline of 314,604 from the previous week.
According to unadjusted numbers, with the current state level, New York showed the sharpest change. It fell by 106,106 from last week. Then, Michigan slid by 23,539, and Texas declined by 20,896. Meanwhile, there were significant gains in Florida and California, with 31,083, and 27,199, respectively.
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