Millions more Americans likely sought unemployment benefits last week, suggesting a broadening of layoffs from consumer facing industries to other segments of the economy and could remain elevated even as many parts of the country start to reopen, Reuters reports.
The Labor Department’s weekly jobless claims report on Thursday will probably reinforce economists’ views of a protracted recovery of the economy, which is reeling from nationwide lockdowns to slow the spread of COVID-19, the respiratory illness caused by the coronavirus.
The economy shrank in the first quarter at the steepest pace since the Great Recession from 2007-2009. The weekly claims report would follow news on Wednesday that private payrolls fell by a record 20.2 million in April, which set up the overall labor market for historic job losses last month.
“Even with the economy slowly starting to reopen, the number of unemployed should continue to rise sharply as governments, as well as businesses that have tried but not succeeded at holding the line, are now laying off workers,” said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania. “The pace of new claims for unemployment is slowing, but remains at levels unimaginable just a few months ago.”
Initial claims for state unemployment benefits likely totaled a seasonally adjusted 3.0 million for the week ended May 2, according to a Reuters survey of economists. That would be down from 3.839 million in the prior week and mark the fifth straight weekly decrease in applications since hitting a record 6.867 million in the week ended March 28.
Last week’s filings would lift the number of people who filed claims for unemployment benefits to about 33.3 million since March 21, roughly 22% of the working age population.
The claims report will have no impact on the Labor Department’s comprehensive employment report for April, which is scheduled to be released on Friday, as it falls outside the period during which the government surveyed establishments and households for its monthly report.
Still, jobless claims totaled 26.5 million through the week of April 12. Economists, however, cautioned that this would not necessarily translate into a similar number of job losses in the government’s closely watched employment report, Reuters adds.