US jobless claims are expected to hit 1.23 million when official figures are released on Thursday, keeping unemployment claims above a million for 16 consecutive weeks.
In the week ended 3 July, 1.31 million Americans filed for claims which were better than a Thomson Reuters analysts’ estimate of 1.37 million as the jobs market attempts to recover from the coronavirus pandemic.
In the previous four weeks, US jobless claims were higher than analysts estimate. In the last 16 weeks, almost 50 million Americans have filed for jobless claims, according to the US Labor Department.
The continuing claims or the people who have already filed for jobless claims in the previous weeks and continue to file for claims were 18.06 million last week, falling 698,000 from the week before.
“The consistently elevated UI [unemployment insurance] claims show a labor market struggling to maintain its recovery as coronavirus cases soar in parts of the US,” said Daniel Zhao, senior economist at Glassdoor. He added: “Initial claims are stalled out at a new normal of over a million new claims every week.”
While initial US jobless claims are still in the millions every week, the nonfarm payroll data portrays a somewhat optimistic picture. The US economy has added 7.5 million new jobs between May and June after losing 22 million jobs between March and April.
The unemployment rate fell to 11.1% in June from the April high of 14.7%. Brokerages predicted a dire outlook for the US employment sector with Goldman Sachs predicting the US unemployment rate to peak at 25%.
However, the economic recovery over the last two months has been swift although there are concerns over future growth. Large parts of the country, including the densely populated states like Florida, Texas and California are struggling with record spikes of new coronavirus cases, which have forced authorities to scale back or pause reopenings of businesses, and sending some workers home again.
Earlier this month, Cleveland Federal Reserve President Loretta Mester said “We saw a reopening in May and activity starting to come back pretty well. Over the past week or so, there’s been some leveling off, and I think it’s probably due to the increase in cases not only in Ohio but across the country.”