The COVID-19 pandemic’s continued impact on the labor market will be highlighted Thursday morning when the U.S. Labor Department releases its weekly initial jobless claims report.
Economists predict that another 2.5 million Americans filed for unemployment benefits in the week ending May 9, following 3.17 million jobless claims in the prior week. Over the past seven weeks, more than 33 million Americans have filed unemployment insurance claims.
Continuing claims, which lags initial jobless claims data by one week, is expected to total 25.12 million in the week ending May 2. There were a record 22.65 million continuing claims in the prior week.
“Initial jobless claims will likely moderate further from historic levels in the week ending 9 May. However, since mid-March, roughly 28 million initial jobless claims have been filed, highlighting the unprecedented collapse in labor market activity,” Nomura economist Lewis Alexander wrote in a note May 8.
The weekly number of jobless claims has been steadily declining even as the cumulative number remains high. And even as states like California continue to report elevated jobless claims figures, the number has been decreasing consistently over recent weeks.
In the week ending May 2, California saw the highest number of initial jobless claims at an estimated 318,000 on an unadjusted basis, down from 325,000 in the prior week. Texas reported 247,000, down from 254,000 in the previous week. Georgia had an estimated 227,000 and New York reported 195,000. Florida, which had the highest number of claims in the prior week, reported 173,000 in the week ending May 2, down considerably from 433,000.
Negative economic impact caused by the coronavirus has been broad-based, and the U.S. labor market has been deteriorating at a rapid clip.
Thursday’s weekly jobless claims comes on the heels of April’s dismal jobs report that showed the U.S. economy lost 20.5 million jobs during the month as a result of COVID-19. The steep drop in payrolls in April was the worst on record going back to the start of data in 1939, and the unemployment rate surged to 14.7% from 4.4% in March.
Nevertheless, economists argued that while the headline figures were staggering, most of the job losses due to the global pandemic are likely temporary, and as states slowly move toward reopening their economies, the path forward is what matters most.
“In our view, while these results are unprecedented, the way forward is what matters for investors,” Oppenheimer Asset Management Chief Investment Strategist John Stoltzfus wrote in a note May 8. “As many states and localities reopen for business, hiring should resume and the economy should begin to revive. Still, the challenge for policymakers is to minimize permanent job losses where possible.”
As of Wednesday afternoon, there were nearly 4.3 million coronavirus cases and 293,000 deaths worldwide, according to Johns Hopkins University data. In the U.S., there were 1.37 million cases and 82,400 deaths.
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Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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