Nearly 3 million Americans filed for new unemployment benefits last week, pushing the number of people who have lost their jobs amid the coronavirus pandemic to more than 36.5 million, the Labor Department reported on Thursday.
A total of 2.981 million individuals filed initial jobless claims last week, a number which equates, roughly, to the total number of coronavirus-related layoffs. While the number was higher than economists surveyed by Dow Jones had been expecting — at 2.7 million — the new number represents the eighth time in a row that claims have fallen from the previous week. Jobless claims peaked at 6.9 million in the final week of March.
The Dow quickly dropped 300 points in futures trading upon hearing the news.
Some 22.8 million Americans are currently drawing unemployment benefits, the Labor Department said.
The total number of jobs lost, now at 36.5 million, is by far the biggest loss in U.S. history. In April, some 20.5 million jobs were lost, which brought the employment rate to 14.7%, both numbers the highest since World War II.
The devastating job loss represents a 180-degree turn in fortunes for American workers. Back in September 2018, the number of Americans who applied for unemployment benefits fell to just 201,000, a number not seen since shortly after man first walked on the moon. For the week ending September 15, such claims dropped by 3,000 to the lowest level since November 12, 1969. The monthly average dropped to 205,750, the lowest since December 1969, the Labor Department reported.
The unemployment rate had dropped from nearly 10% in 2010 under President Obama all the way down to 3.4% under President Trump.
Still, there was some optimism expressed after the new numbers were released.
“The numbers … are still alarming of course but with more reopenings occurring in the coming months they should continue to recede. Continuing claims though will remain high as the pace of rehirings will be gradual and coincident with the pace and degree of the reopenings,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, told CNBC.
The latest numbers are still off from the Great Depression, when unemployment reached nearly 25%. But the rate didn’t drop into single digits for a decade, until 1941, after the Japanese attacked Pearl Harbor and the U.S. entered World War II.
The numbers could actually be far worse.
“The Economic Policy Institute earlier this week estimated that the current claims level probably undercounts by as much as 12 million those who are eligible for benefits but not getting them due to the inability to file or other roadblocks,” CNBC reported last month.
Earlier this month, the Commerce Department announced the U.S. economy shrank at a 4.8% annual rate in the first quarter as the coronavirus pandemic prompted states to shut down businesses.
After the longest economic expansion in history under Trump, the gross domestic product (GDP) posted a quarterly drop for the first time in six years, the Commerce Department said. The GDP measures the total output of goods and services in the economy.
The 4.8% drop was the highest since the economy shrank at an 8.4% annual rate in the fourth quarter of 2008, during the Great Recession.
“Forecasters say the drop in the January-March quarter will be only a precursor of a far grimmer GDP report to come on the current April-June period, with business shutdowns and layoffs striking with devastating force. The Congressional Budget Office has estimated that GDP will plunge this quarter at a 40% annual rate,” The Associated Press reported.
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