The pace of first-time jobless claims declined for the ninth consecutive week, to 1.83 million, bringing the cumulative total of those who have lost jobs over the past 11 weeks to 42.6 million.
In the era of pandemic economics, this is what constitutes good news. To put that in perspective, there are more Americans who have filed first-time jobless claims than the entire population of Iraq.
It is important to note that this data will not be part of the May employment report, which we expect to show a loss of 7.8 million jobs and an increase in the unemployment rate to 21.5% when it is released on Friday. Thursday’s data, released by the Labor Department, for the weeks ending May 23 and May 30 will feed into the estimation of the June employment report, which comes out in early July.
Continuing claims increased by 649,000 to 21.48 million for the week ending May 23, which is below the pandemic peak of 24.9 million for the week ending May 8. The pace of continuing claims is likely to continue to be somewhat volatile as states move through the backlog of people filing for unemployment benefits.
But we do think that for now, continuing claims have peaked, which is likely a sign of people slowly returning to work as the economy gradually reopens. It is another key data point that implies the economic free fall caused by the pandemic ended over the past few weeks.
During the week ending May 16, 35 states reported 10,740,918 people claiming Pandemic Unemployment Assistance benefits and 28 states reported 209,692 people claiming Pandemic Emergency Unemployment Compensation benefits.
The insured unemployment rate implies a 14.8% unemployment rate, which almost surely understates the actual unemployment and underemployment rate.
Over the past 11 weeks, since the onset of the pandemic, 42.6 million people have lost their jobs, which is equal to 28.4% of those working in early March. That would imply a real-time underemployment rate of somewhere near 31.9%.
For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.
