Another 1.5M Americans filed for new jobless claims last week, bringing
About 1.5 million laid-off workers applied for U.S. unemployment benefits last week, a historically high number, even as the economy increasingly reopens and employers bring some people back to work.
The latest figure from the Labour Department marked the 11th straight weekly decline in applications since they peaked at nearly 7 million in March as the coronavirus shut down much of the economy and caused tens of millions of layoffs. The decline was much smaller, though, than in recent weeks, falling just 58,000.
The total number of people receiving unemployment aid also fell slightly, reflecting the return of many to their old jobs.
The job market appears to have begun a slow recovery. In May, employers added 2.5 million jobs, an increase that suggested that the job market has bottomed out. The unemployment rate declined from 14.7 per cent to a still-high 13.3 per cent.
Even with the May hiring gain, nearly 21 million people are officially classified as unemployed. And including people the government said had been erroneously categorized as employed in May and those who lost jobs but didn’t look for new ones, 32.5 million people are out of work, economists estimate.
To BMO economist Jennifer Lee, there was some good news and some bad news in the numbers. While the number of recipients is still “stubbornly high,” she said “we are grateful that at least they’re moving in the right direction. And, this is a good sign that the increase in payrolls will continue in June.”
“It has been a couple of months since the U.S. reopened and the bounceback in activity is certainly a welcome sight,” she said. “Expect this to continue, though it might come at an erratic pace as 2nd wave/extension of 1st wave fears come into play.”
760,000 gig workers file, too
Thursday’s report also showed that an additional 760,000 people applied for jobless benefits last week under a new program for self-employed and gig workers that made them eligible for aid for the first time. These figures aren’t adjusted for seasonal variations, so the government doesn’t include them in the official count.
The steady decline in jobless claims follows some other encouraging reports that suggest that the lifting of shutdown orders has sparked some pent-up demand from consumers, whose spending largely drives the economy. Most economic gauges remain far below their pre-pandemic levels, though, and some analysts question whether the recent gains can be sustained, especially if the virus were to surge back.
Last month, retail and restaurant sales jumped nearly 18 per cent, the government said Tuesday, retracing some of the record plunges of the previous two months. Even so, retail purchases remain a sizable 6 per centbelow their year-ago levels.
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