Another 1.5 million people filed for unemployment benefits last week even as states across the US continued to relax their coronavirus quarantine measures.
In just 12 weeks more than 44 million claims have been made for benefits as people lost their jobs. Rehiring appears to have started. Last week the labor department said the unemployment rate had dipped in May to 13.3% from 14.7% in April – although officials said difficulty collecting data meant the figure was probably 3% higher.
Yesterday Jerome Powell, chair of the Federal Reserve, said the central bank expected unemployment to dip to 9.3% by the year end, it was 3.5% in February. Powell warned that while the trend was positive it would be “difficult for many people to find work” for “an extended period”.
Last week was the second week in a row that unemployment claims were below 2m, a sign that layoffs are slowing from the peak of 6.6m in April. The numbers, however, remain historically high. In the last recession, the highest number of weekly unemployment claims peaked at 665,000 in March 2009, and the previous all-time mark was 695,000 in October 1982.
“The downward trend is obviously good news, but in the context of an economy that is reopening it is extremely high, especially when viewed against previous recessions,” James Knightley, chief international economist at ING, wrote in a note to investors.