Number of Americans on jobless benefits inches down for 1st time since pandemic began
21 million Americans got unemployment insurance the week ended May 16
The number of Americans continuing to receive government jobless benefits declined in the week ending May 16 for the first time since COVID-19 struck, even as millions of people continue to join the unemployment rolls.
The U.S. Department of Labour said 21.052 million people continued to receive benefits that week. That's down from the record 24.912 million seen the previous week.
"The number of Americans who remain on UI is still uncomfortably high," Bank of Montreal economist Jennifer Lee said, "but it is not at a record anymore and that is a start."
The initial claims figure — which represents the number of people filling out applications for jobless benefits for the first time — held above two million last week for a 10th straight week amid second-wave layoffs in the private sector, such as the 12,000 announced this week by plane manufacturer Boeing.
Initial claims for state unemployment benefits totalled a seasonally adjusted 2.123 million for the week ended May 23, from a revised 2.446 million in the prior week. Economists polled by Reuters had forecast initial claims falling to 2.1 million in the latest week from the previously reported 2.438 million.
Though claims have declined steadily since hitting a record 6.867 million in late March, they have not registered below two million since mid-March. The astonishingly high level of claims has persisted even as non-essential businesses are starting to reopen after shuttering in mid-March to control the spread of COVID-19, an indication it could take a while for the economy to dig out of the coronavirus-induced slump.
"I am concerned that we are seeing a second round of private sector layoffs that, coupled with a rising number of public sector cutbacks, is driving up the number of people unemployed," said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania.
"If that is the case, given the pace of reopening, we could be in for an extended period of extraordinary high unemployment. And that means the recovery will be slower and will take a lot longer."
With files from Reuters