Another 1.3 million Americans are expected to have filed for initial jobless claims when latest report is published on Thursday, according to the consensus estimates compiled by Thomson Reuters.
These claims are for 13 June, in the prior week ended 6 June 1.54 million Americans filed for claims which were slightly better than expected. In the last 12 weeks, 44 million Americans have filed for claims. However, the jobless claims have been gradually falling after peaking at 6.8 million in the week ended 28 March.
Since then, US jobless claims have fallen in every week and economists expect the trend to continue. Meanwhile, the nonfarm payroll data for May surprised on the upside. The US economy added 2.5 million jobs in the month, while economists were expecting that the economy would shed jobs.
May was the first month since February when the US economy added jobs. The unemployment rate improved to 13.3% in May from 14.4% in April. The continuing claims or the people who have already filed for claims in the previous weeks and continue to file for claims were 20.9 million in the last week.
No second US shutdown
“The worst in the labor market appears to be over, but it is still in terrible condition from the viral recession,” Gus Faucher of PNC Financial Services told MarketWatch.
As states have reopened, US initial jobless claims have come down. However, there are fears of a second wave of infections. Last week, Treasury Secretary Steven Mnuchin denied another shutdown despite fears of the second wave.
“We can’t shut down the economy again. I think we’ve learned that if you shut down the economy, you’re going to create more damage,” Mnuchin told CNBC.
As the economic activity resumes, US jobless claims should continue to tail off. However, it looks a long road ahead before the US employment reverts to pre-pandemic levels.
Last week Federal Reserve chairman Jerome Powell said: “It could be some years before we get back to those people finding jobs.” Powell, who was speaking at the end of the Federal Open Market Committee’s two-day policy meeting, added that millions of Americans might not be able to get back their old jobs.
Note: These are testing times for individuals. If you’re interested in raising finance to see you through this tough period, see our list of some of the best loan providers. There is also a list of loan providers for people with bad credit.