- New unemployment claims hit 1.87M last week
- First time in 11 weeks that benefit claims under 2M
- Total new claims filed reaches 42.6M
The unemployment level continues to stagger the imagination as the total number of new claims for insurance benefits hit 42.6M last week, according to the US Labor Department. A glimmer of light in these new numbers is that the week ending May 23 saw -249,000 fewer unemployment claims than the week ending May 16. All in all, the number has been declining from the peak of 6.8M during the week ending March 28.
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Continued claims rose 649,000 to 21.5M in the week ending May 23.
Even in the midst of these millions of pink slips or “Thanks but no thanks,” some workers have started going back to work. According to the payroll processor ADP, private sector workers cut a bit less than 2.8M jobs between April and May, a much smaller job loss and a much faster return to work than forecasters were predicting.
According to the Century Foundation, a progressive think tank, the government rendered $71.5B in jobless benefits during the first three weeks of May. That $71.5B amounts to +48% more than it paid out during the entire month of April.
Moody’s Investors Service is forecasting that workers in the industries of health care, construction and manufacturing could experience a relatively fast return to work while employment recovery in other sectors of the economy, such as travel, entertainment and, nonessential retail, could take much longer.
Remember that these numbers from the Labor Department do NOT include the PUA jobless claims that have been filed in some 18 states so far. Some of these undercounted jobless claims include:
– Alabama 55,572 through May 30
– Alaska 10,161 through May 28
– Arizona 77,063 through week ending May 16
– Florida 171,962 through June 2
– Georgia more than 83,583 as of May 2
– Hawaii at least 43,546 as of June 1
– Oregon more than 10,000 as of May 7
– Vermont at least 15,000 as of May 22
– West Virginia more than 29,300 as of May 29
The Bloomberg Economics analysis of joblessness underlines how unemployment and reduced incomes are extending well beyond the retail, restaurant, travel and leisure industries that were immediately walloped by the pandemic shutdowns. Alexander Lin, a senior US economist with Bank of America is seeing industries such as financial and scientific services with “…claims actually starting to pick up or trend sideways…and the new reality may be that you don’t need as many workers.”
If a second round of layoffs more directed at white collar, higher paying jobs happens, though likely not as high in number as the initial layoffs, such layoffs could land a big stomach punch to the economy because these workers, these solidly middle class workers, essentially drive a major growth engine of the economy, discretionary spending.
Thanks to National Public Radio and BloombergNews.