While the pace of first-time jobless claims has slowed over the past five weeks — about the only good thing one can say about the labor market in the United States — the increase of 3.2 million in jobless claims for the week ending May 2 brings the cumulative total to 33.5 million during the past seven weeks.
The report implies a near real-time unemployment rate of at least 25.8%.
That would imply an increase in the near real-time unemployment rate to a minimum of 25.8%.
Given the well-known problems in filing claims around the country, those workers classified as furloughed will face the permanent loss of a job, and the unique set of conditions around shelter-in-place orders and self-distancing will tend to produce an undercount of the unemployed.
It is important to note that the data in the initial claims data released on Thursday will not be part of, nor feed into, the estimate of monthly job losses or the unemployment rate in Friday’s April U.S. jobs report. This data will feed into the May employment report, which will be published on June 5.
U.S. continuing claims increased to a time series high of 22.6 million, which implies an insured unemployment rate of 15.5%, which is also a record high.
From our vantage point, this data is far more important than Friday’s jobs report. While that report for April will feature the single largest loss of employment and a record high in the unemployment rate since its beginning in 1948, the claims data strongly suggest that the U.S. has not yet observed a peak in job losses and the unemployment rate, and a likely decline in hours worked. That, unfortunately, lies ahead.
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