Americans File 1.9 Million Initial Claims; 11-Week Total at 42.6 Million
The positive news is initial unemployment claims fell for the ninth consecutive week. The not-so-positive: nearly 28 percent of Americans who had jobs in February are now out of work.
The Labor Department yesterday reported initial unemployment claims for the last week of May fell to 1.9 million, a decrease of 250,000 from the previous week and well down from the April peak of 6.9 million. But that figure was still high by historical standards–since the economic effects of coronavirus pandemic struck 11 weeks ago, a mind-boggling 42.6 million American workers have filed unemployment claims.
BLS said the advance number for seasonally adjusted insured unemployment—also known as “continued claims”—during the week ending May 23 rose to 21.487 million, an increase of 649,000 from the previous week’s revised level. The four-week moving average fell to 22.446 million, a decrease of 222,500 from the previous week’s revised average.
The report said the total number of people claiming benefits in all programs for the week ending May 16 fell to 29.6 million, a decrease of 991,744 from the previous week. By comparison, BLS said 1.5 million people claimed benefits in all programs a year ago..
The 1.9 million was the ninth straight decline, but after 11 weeks it remains staggeringly high,” said Tim Quinlan, Senior Economist with Wells Fargo Securities, Charlotte, N.C. “Most states have likely worked through technical backlogs, which means that layoffs have clearly spread well beyond the directly affected industries.”
Quinlan said the jump in continuing claims was concerning. “Last week we were excited to see that continuing claims fell, indicating that gross hiring had picked up enough to pull down the number of people receiving benefits,” he said. “There was no such consolation this week, as they rose again to 21.5 million. California’s biweekly reporting regime has something to do with this, but even stripping that out, continuing claims are barely falling despite most of the country now being ‘open’ again.”
Doug Duncan, Chief Economist with Fannie Mae, Washington, D.C., agreed. “While down from its all-time high of 25 million on May 9, this number still represents about 14 percent of the workforce,” he said. “Continued claims represent the cumulative number of persons claiming unemployment insurance benefits at a point in time and is therefore a better, though still imperfect, measure of the total extent of joblessness in the economy.”
Yesterday’s initial claims report was the second of three major jobs reports this week. On Wednesday, ADP, Roseland, N.J., said private-sector employment fell by 2.76 million jobs in May. This morning at 8:30 a.m. ET, the Bureau of Labor Statistics will release its May Employment report. MBA NewsLink will provide coverage , including commentary and analysis from MBA Chief Economist Mike Fratantoni.