Another day, another post about scary economic news. New unemployment claims rose again last week, adding 2.4 million new claims and bringing total first time claims to 38.6 million. A new record!
It’s a large number, but the overall trend is headed in the right direction. Claims peaked at nearly 7 million for the week ending on March 28th, and have since fallen during each subsequent week. From May 10th through May 16th, 249,000 fewer claims were added than the week prior, marking the seventh weekly decline in a row. Last week’s total claim was also revised down, from 2.98 million to 2.69 million.
California, New York, and Washington state had the most new claims, while Georgia, New Jersey, and Kentucky saw the biggest contraction. You may remember that last week, Connecticut reported a staggering 260,000 new unemployment claims. Those numbers were revised down, after officials accidentally overstated their numbers by nearly ten fold. Unemployment claims in Michigan fell by 700 the week before the automotive industry came back online. Here’s hoping that they fall by a lot more when the next batch of unemployment numbers come out.
Official unemployment numbers do not count independent contractors and ‘gig’ workers, who are applying for unemployment for the first time through a new, temporary federal program. Although they are not included in the overhead unemployment number, the number of claims are estimated in the hundred of thousands. Numbers are not broken out by sector, but states can add notes on particular industries. New York state, which reported the second highest number of new claims, noted an increase in transportation and warehousing layoffs.
Federal Reserve Chairman Jay Powell has warned that a full recovery may not happen until the end of 2021. At the Federal Reserve April meeting, officials expressed concern that the coronavirus would ‘continue to weigh heavily on economic activity, employment, and inflation in the near term and would pose considerable risks to the economic outlook over the medium term’.