First-time jobless claims for the week ending May 23 increased by 2.123 million, bringing the total number of Americans who have filed for unemployment benefits to 40.76 million during the past 10 weeks.
The unemployment rate will most likely peak near 25% this year.
This data, released Thursday by the Department of Labor, strongly implies that the unemployment rate will most likely peak near 25% this year, with top-line claims reaching 50 million over the next several weeks.
Continuing claims eased to 21 million from 24.9 million. The insured unemployment rate dropped to 14.5% from 17.1%.
To put this data in perspective, the number of people filing first-time claims during the initial 10 weeks of the pandemic now exceeds all of those who filed such claims during the Great Recession.
It is time to begin considering how many people will face the permanent loss of a job. We expect that roughly one in four workers will meet such a fate.
Using data for the week ending May 23, that implies an unemployment rate of 10.1% once the other 30 million people return to work later this year or in early to mid-2021.
Based on the data for the week ending May 23, roughly 27.2% of those who held jobs before the pandemic have filed for unemployment insurance.
That implies a near real-time underemployment rate of more than 30%. We expect to observe that in the June estimate of employment by the Bureau of Labor Statistics, to be released in July.
For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.