Another 1.6M workers likely filed jobless claims as layoffs continue

Another 1.6M workers likely filed jobless claims as layoffs continue

Paul Davidson
USA TODAYPublished 10:32 AM EDT Jun 10, 2020Last week’s jobs report revealed a shocking 2.5 million payroll gains in May, underscoring that many Americans are returning to work as states begin allowing businesses shuttered by the coronavirus pandemic to reopen.The latest tally of jobless claims, due Thursday, will shine a light on the other side of the story: Hundreds of thousands of Americans are still being laid off.Economists surveyed by Bloomberg expect the Labor Department to report another 1.6 million first-time applications for unemployment insurance last week, down from 1.9 million the prior week.That would push total initial claims — a reliable gauge of layoffs across the U.S. – over the past 12 weeks to a staggering 44.2 million. But it also would mark the tenth straight weekly decline since claims peaked at 6.9 million at the end of March. If the trend continues, the count likely will dip below a million by early July, says economist Ian Shepherdson of Pantheon Macroeconomics.The weekly tallies are still far higher than the previous record of 695,000 unemployment claims during a deep recession in October 1982.The 2.5 million net jobs added last month showed that the number of unemployed workers rehired as businesses reopen outpaced the number of layoffs – a turnabout that occurred a month sooner than anticipated. Yet with layoffs persisting in large numbers, that trend must continue to ensure that, in the second half of the year, the economy can reverse at least half the unprecedented damage inflicted by the coronavirus, as many analysts expect.The stubbornly high level of jobless claims indicates “that layoffs have clearly spread well beyond” the industries directly affected by the pandemic and state shutdowns, Wells Fargo wrote in a note to clients. Those include airlines, hotels, restaurants, retailers, movie theaters and beauty salons. Increasingly, for example, professional services firms have been hit by job cuts.Worst-kept secret revealed: It’s official: The US is in a recession, ending longest expansion in historyEconomists are starting to focus more intently on continuing jobless claims, which represent the total of Americans receiving benefits, with a one-week lag. The figure thus reflects the vast majority of those still unemployed and should keep falling as more states reopen their economies. Initial claims, by contrast, are made up of those laid off the prior week.In mid-May, continuing claims fell by 3.9 million, indicating that more people came off the unemployment rolls than joined. But in the week ending May 23, continuing claims rose by 649,000 to 21.5 million.More store closings: Signet Jewelers, Kay and Zales parent company, says it won’t reopen 150 stores, plans to close more locationsEconomists note the large decline was partly driven by big drops in California and Florida, which require the unemployed to file claims every two weeks and benefited from an off week. Filing resumed in those states during the most recent week, but the broader trend nationwide is still downward. Economists on Thursday will be looking for substantial declines in continuing claims in the rest of the country. 


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