U.S. new weekly jobless claims drop below 2 million
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[June 04, 2020] By
Lucia Mutikani
WASHINGTON (Reuters) - The number of
Americans filing for unemployment benefits dropped below 2 million last
week for the first time since mid-March, but remains astonishingly high
as companies adjust to an environment that has been significantly
changed by COVID-19.
New claims for state unemployment benefits totaled a seasonally adjusted
1.877 million for the week ended May 30, down from 2.126 million the
prior week, the Labor Department reported on Thursday. Economists polled
by Reuters had forecast 1.8 million initial claims in the latest week.
New jobless claims have declined since hitting a record 6.867 million in
late March. Despite the still elevated reading, the most recent data
suggested the worst is over for the labor market, combined with data on
Wednesday that showed a smaller-than-expected drop in private payrolls
in May.
Surveys have also shown consumer confidence, manufacturing and services
industries stabilizing albeit at low levels in May, indicating the
downturn triggered by a near shutdown of the country in mid-March to
control the spread of COVID-19 was bottoming. Many businesses had
reopened by mid-May.
Economists said the stubbornly high number of unemployment claims comes
from a second wave of layoffs as businesses navigate weak demand, as
well as some lingering backlogs at state unemployment offices
overwhelmed by the flood of applications early in the shutdown.
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People who lost their jobs are reflected in the door of an Arkansas
Workforce Center as they wait in line to file for unemployment
following an outbreak of the coronavirus disease (COVID-19), in Fort
Smith, Arkansas, U.S. April 6, 2020. REUTERS/Nick Oxford/File Photo
"Many of the new claims reflect current layoffs, as the corporate sector more
broadly begins to adjust to the altered outlook for the year ahead," said Lou
Crandall, chief economist of Wrightson ICAP LLC in Jersey City, New Jersey.
"Even as the economy begins to reopen, new job losses continue to pile up."
Boeing <BA.N> and pipeline operator Energy Transfer <ET.N> have announced
layoffs, while some big retailers like JC Penney and high-end chain Neiman
Marcus have filed for bankruptcy. States and local governments, whose budgets
have been decimated by the COVID-19 fight, are also cutting jobs.
The government's closely watched employment report for May, scheduled for
release on Friday, is likely to show nonfarm payrolls falling by 8 million in
May after a record 20.537 million plunge in April, according to a Reuters survey
of economists. The unemployment rate is forecast rocketing to 19.8%, a post
World War Two record, from 14.7% in April.
(Reporting By Lucia Mutikani; Editing by Chizu Nomiyama)
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