US new jobless claims: 1.9m filings take total above 42m
Another 1.9m Americans made new jobless claims last week as the economy battled coronavirus, taking the total number of claims since the pandemic began to above 42m.
It was the first sub-2m number since Covid-19 began to ravage the US economy, however, with some analysts predicting the worst is over for growth. A week earlier, 2.1m Americans made new jobless claims.
The Department of Labor said the insured employment rate – the percentage of working age people receiving jobless benefits – was 14.8 per cent for the week ending May 23.
Today’s new jobless claims figures came ahead of a nervously awaited official unemployment reading for May tomorrow. Unemployment hit 14.7 per cent in April, by far the worst number seen since the Great Depression.
“This week’s initial jobless claims have continued their downward trend, but all eyes will be on tomorrow’s unemployment data for May,” said Richard Flynn, UK managing director at Charles Schwab.
He said they will “likely show another round of staggering job losses and a sharp rise in unemployment since April’s reading”.
New jobless claims have been steadily falling since late March. In the week to 28 March, claims peaked at 6.9m. Graphs have had to be redrawn to account for the unprecedented surge in unemployment.
In the depths of the financial crisis, 800,000 jobs were lost in the worst month. The scale of unemployment suggests the US economy could face longer-term scarring after the pandemic passes.
The US Federal Reserve has slashed interest rates to a record low of between zero and 0.25 per cent. It has ramped up its quantitative easing bond-buying and lent billions of dollars to main street.
The Trump administration and Congress have also legislated to pump trillions of dollars into the economy. The Democrats and Republicans have struggled to agree on the latest round of stimulus efforts, however.