Business & Economy

US initial jobless claims rise by additional 2.44 mn

Washington, May 21 (efe-epa).- Initial jobless claims in the United States continued to trend downward in the week ending May 16, but they still came in at a seasonally adjusted 2.44 million as coronavirus-triggered lockdowns kept battering the world’s largest economy, the Labor Department said Thursday.

The number of claims filed last week reflects a congressionally approved expansion in eligibility for unemployment insurance benefits, which under a $2.2 trillion stimulus package signed into law in March are now available for self-employed persons and independent contractors such as Uber drivers.

Since the impact of the states’ Covid-19-triggered stay-at-home orders and closures of non-essential businesses began to be felt in the unemployment statistics nine weeks ago, the number of first-time filings for jobless benefits (a proxy for layoffs) has skyrocketed to more than 38.6 million.

The Federal Reserve has unleashed much of its monetary arsenal in a bid to ease the economic impact of the pandemic, including injecting massive liquidity into financial markets, making large-scale purchases of Treasuries and agency mortgage-backed securities and lowering its benchmark interest rate to practically zero.

Federal Reserve Chairman Jerome Powell, who has resisted calls from President Donald Trump to push the federal-funds rate into negative territory (a step countries such as Switzerland and Japan have taken), this week urged Congress to pass another stimulus package in addition to the nearly $3 trillion it has already approved to combat the coronavirus crisis.

Referring to the effect of states’ measures to shut down broad swaths of their economies, he told a Senate committee this week that the economic crisis has “caused a level of pain that is hard to capture in words, as lives are upended amid great uncertainty about the future.”

The latest jobless claims figure slightly exceeded economists’ forecasts, but was lower than the downwardly revised figure of 2,687,000 for the week ending May 9.

The four-week moving average of initial jobless claims, which smooths out week-to-week variations, came in at 3.04 million in the week ending May 9, down from 3.54 million in the previous week.

Georgia, a southeastern state whose Republican governor was criticized last month by Trump for moving faster in reopening non-essential businesses than the federal guidelines recommended, experienced the biggest week-to-week drop in initial jobless claims (66,224) of all 50 states.

After 242,772 people filed for unemployment benefits in Georgia in the week ending May 9, initial jobless claims came in at 176,548 last week.

At the other end of the spectrum, the northwestern state of Washington reported the highest weekly increase in initial jobless claims (34,397), which rose from 110,831 in the week ending May 9 to 145,228 last week.

Earlier this month, the Democratic governor of that state, Jay Inslee, announced an extension of Washington’s stay-at-home order until May 31.

Nationwide, jobless claims have been trending downward since hitting a peak of more than 6.2 million in the last week of March.

The advance number for seasonally adjusted insured unemployment (also known as continued claims and reported with a one-week lag) during the week ending May 9 rose to a record 25.1 million, an increase of 2.5 million from the previous week’s revised level, the Labor Department said.

The insured unemployment figure is an indicator that tracks people who have already filed an initial claim and experienced at least one week of unemployment before filing a continued claim.

Earlier this month, the Labor Department reported that the unemployment rate shot up by 10.3 percentage points in April (from March) to 14.7 percent, its highest level since the Great Depression of the 1930s and the biggest month-to-month increase ever recorded.

Prior to the coronavirus crisis, weekly initial jobless claims had come in at an average of around 200,000 for several months, and the unemployment rate had held steady at around 3.5 percent, a half-century low. EFE-EPA


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