36.5 Million Jobs Lost

36.5 Million Jobs Lost

USA Today file photo

Nearly 3 million Americans filed new unemployment claims last week, the Labor Department said Thursday, lifting the total over the past eight weeks to 36.5 million.

Last week’s total was higher than economists’ consensus expectations of 2.7 million new claims, but represents a drop of nearly 200,000 from the previous week. “The weekly count of claims filings still remains massive relative to the norms that existed prior to the spread of COVID-19, but at least the figures have declined in each of the most recent six reported weeks,” J.P. Morgan economist Daniel Silver wrote in a note to clients.

White House economic adviser Kevin Hassett called the numbers “better than expected” and told reporters that the new data showed signs of an economic rebound. “The fact that we came in under 3 million suggests that the turning on of the economy is beginning, and it’s beginning to show up in the data,” he said.

Continuing claims rose by 456,000 to a record 22.83 million, but the previous week’s total was revised down to 22.38 million, a change that Paul Ashworth, chief U.S. economist at Capital Economics, said suggests that the number of people returning to work nearly matches those losing jobs.

“What the continuing claims figures and the insured unemployment rate are more reliably telling us is that the unemployment rate was close to peaking at the start of May, as the number of people returning to their jobs almost offset new job losers,” Ashworth wrote in a note. “With most states only beginning to ease their lockdowns within the last 10 days, we expect a much bigger swing in hiring versus firing over the next couple of weeks, which suggests the unemployment rate will begin to drop back.”

Still, economist Ian Shepherdson of Pantheon Macroeconomics said he was pushing back his target for when new claims would drop below 1 million from mid-June to the end of next month.

How much is unemployment insurance helping? A new report from the Hamilton Project at the Brookings Institution finds that unemployment insurance offset only a small portion of lost income in March, but covered about half of lost wages and salaries in April, when states and the federal government paid out $48 billion in unemployment benefits. “The unemployment system has sent out more money in April of 2020 than it did in the first four months of 2009 during the Great Recession,” the authors write.