Weekly unemployment claims rise by 3.2M as states move to reopen

The number of Americans losing jobs to the coronavirus pandemic continued last week to climb steeply, the Labor Department reported Thursday, with 3.2 million new unemployment claims filed.

The latest figure, which covers the week ending May 2, puts job losses over the past seven weeks at nearly 33.5 million, prompting many economists to suggest that unemployment now stands higher than in most Americans’ lifetimes.

The Bureau of Labor Statistics on Friday will release its more precise estimate of the April unemployment rate as part of its monthly jobs report.

The private payroll company ADP reported Wednesday that its own survey indicated 20.2 million private-sector jobs were lost last month, largely in the service-providing industries. But that number could well be too low, given that the report relies on data that runs only through April 12.

Self-employed workers who were made temporarily eligible last month for jobless benefits under the CARES Act are starting to trickle into DOL’s weekly claims count. Thirty-one states have updated their systems to begin cutting unemployment checks to those workers, according to DOL. But 21 of those states implemented the new program only in the last two weeks.

States have struggled to process the flood of new claims that began in mid-March, when non-essential workers were first ordered to stay home. Nine states have asked DOL for $36 billion in federal advances to cover the skyrocketing costs of the benefit payouts amid the pandemic, with Illinois topping the list with an $11 billion request.

California took out its first $348 million unemployment insurance loan last week, just two years after repaying the $65 billion it borrowed from the federal government during and after the Great Recession of 2007-9.

More than two dozen states have started reopening their economies and reducing stay-at-home restrictions, as lawmakers in Washington debate whether to move forward with another round of coronavirus relief.

But despite the continued weekly rise in unemployment claims, Federal Reserve Vice Chairman Richard Clarida this week predicted that the economy will get its bearings in the second half of the year.

“We’re living through the most severe contraction in activity and surge in unemployment that we’ve seen in our lifetimes,” he said Tuesday on CNBC.

Chicago Federal Reserve President Charles Evans agreed, telling reporters on Tuesday that “the pickup in activity will likely be slow at first, because of continued social distancing and other safety precautions.”

Source: https://www.politico.com/news/2020/05/07/coronavirus-unemployment-claims-numbers-242131
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