US jobless claims ease to 1.9m as economy struggles to reopen

Almost 1.9m Americans filed for unemployment benefits for the first time last week, taking the total number of new claims to nearly 43m since lockdowns began in mid-March as the US economy struggles to reopen.

Initial jobless claims slowed for the ninth consecutive week to 1.87m in the week ended May 30, the US labour department said on Thursday. That marked the first time claims fell below 2m in the eleven weeks since the start of the pandemic shutdowns, and compares with economists’ expectations of 1.84m.

Continuing claims, which counts the number of people actually receiving benefits and is considered a gauge of ongoing unemployment, edged up to 21.48m for the week ending May 23, accounting for 14.8 per cent of the workforce.

The slowing in the pace of jobless claims and the number of people collecting benefits indicates some Americans are returning to work as states have begun to emerge from Covid-19 shutdowns and reboot activity.

California and Florida were the states with the highest initial claims last week.
Federal Reserve chair Jay Powell has said the US central bank is “strongly committed” to deploying measures to help the economy during the coronavirus pandemic. 

Concerns remain that largely peaceful protests against racism and police brutality following the death of George Floyd which are accompanied by sporadic looting and vandalism of businesses could delay reopenings and slow the recovery.

Congress approved almost $3tn of economic relief measures to support businesses and households, but the expanded jobless benefits are expected to expire in July. The House of Representatives has approved a fresh $3tn of stimulus though the measure is unlikely to gain Republican support, who argue the Democratic plan, which includes an extension in jobless benefits to early next year could deter Americans from returning to work.

The jobless claims figures come ahead of Friday’s non-farm payroll report, which is expected to show the US economy shed 8m jobs in May, on top of the record 20.5m in job losses the previous month — pushing the unemployment rate to 19.5 per cent. 

Link to Original Story

Leave a Reply

Your email address will not be published. Required fields are marked *