More than 4 million Americans applied for unemployment benefits last week, bringing the five-week total during the coronavirus pandemic to 26.5 million in the steepest downturn for the U.S. labor market since the Great Depression.
Initial jobless claims of 4.43 million in the week ended April 18 followed a slightly downwardly revised 5.24 million in the prior week, according to Labor Department figures Thursday. The median estimate of economists was for 4.5 million claims.
Assuming all who filed for benefits are counted as unemployed, the latest figures suggest an April jobless rate of potentially around 20%, given that Thursday’s data reflect the reference week for the monthly jobs report. That’s double the 10% peak reached in the wake of the global financial crisis in 2009.
Most states continued to see initial claims decline on an unadjusted basis, a sign that layoffs could be slowing a bit. While several states reported declines in layoffs for the prior week, it’s unclear to what extent the figures reflect Americans still losing their jobs by the millions, or if people are getting through on jammed websites and phone lines to apply for benefits after weeks of attempts.
U.S. stocks rose after the report, while 10-year Treasury yields were little changed.
Unadjusted claims in Florida more than doubled from the prior week to an estimated 505,000. Connecticut and West Virginia also posted sharp increases.
Continuing claims, or the total number of Americans receiving unemployment benefits, rose by 4.1 million to an all-time high of 16 million in the week ended April 11. That pushed the insured unemployment rate to 11% — the highest on record.
What Bloomberg’s Economists Say
The latest initial claims represent the “third consecutive weekly drop from a peak of nearly 6.9 million at the end of March. While this is an important turning point, the flood of claims will likely continue.”
— Eliza Winger and Carl Riccadonna
Read more for the full reaction note.
Those figures are reported with a one-week lag. States typically take several weeks to process applications and issue payments and may also be facing additional delays now due to unusually high volumes. Some states have taken steps such as staggering applications by alphabetical order of last name or the last digit of one’s social security number on certain days of the week.
The massive government stimulus law also provides an extra $600 per week in unemployment benefits, but several states have seen delays in providing the additional aid due to processing issues.
California reported the most initial claims last week, at an unadjusted 533,600, down from 655,500 the prior week. Florida was next, followed by Texas at 280,400, up slightly from the prior week. Georgia and New York also reported more than 200,000 filings, though both down from the previous week.
In Texas, the state employment office has taken outsize steps to manage the surge in applications for unemployment benefits. The Lone Star State has seen 1.6 million applications related to the pandemic, compared to 700,000 in all of 2019.
“It’s still a lot of numbers coming in,” said Cisco Gamez, a spokesman for the Texas Workforce Commission. “We are making changes, making advances, updating our phone systems and our web systems, adding more staff, adding call centers to meet the demand of people who are filing for unemployment insurance.”
The Texas Workforce Commission recently added an eighth call center and paid out $499 million in benefits in just the first two days of this week.
— With assistance by Chris Middleton, Catarina Saraiva, Sophie Caronello, and Samuel Dodge
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