New Unemployment Claims Plateau at 1.5 Million
The Labor Department’s weekly unemployment report was released this morning and it was mediocre. New claims fell from 1.54 million two weeks ago, to 1.48 million last week. At least new claims didn’t grow, but it’s nothing like the precipitous declines we had seen since initial applications peaked in March. There were 728,120 initial claims from freelancers and general contractors under the Pandemic Unemployment Assistance program.
The economy has been adding jobs back, but those gains are beginning to stem. 19.5 million people are currently utilizing unemployment benefits, equivalent to 13.4% of the workforce. Continuing claims stood at 20.6 million at the end of May, then fell to 20.3 million at the beginning of June. Over 47 million people sought benefits since the onset of this pandemic. The June unemployment situation comes out next Thursday, and economists are hopeful that 3 million jobs will be added.
A big part of the problem is that the coronavirus has been threatening a resurgence. In the United States, more than 45,000 new cases were diagnosed on June 24th alone. That eclipses April’s record by over 9,000, and mirrors World Health Organization reports of a single day record on Sunday. Stateside, Covid cases are increasing in southern and western states in particular.
California, Pennsylvania, New Jersey, and Maryland all saw unemployment creep back up. California led new unemployment claims, at nearly 46,000 new applications. Georgia, Oklahoma, Kentucky, Texas reported fewer new claims. We’ll keep an eye on state trends as coronavirus continues to menace us all.
The past couple of weeks have been a mixed bag, economically. Retail spending grew by 18% in May, still 6.0% lower than where it was last year. At 13.3%, May unemployment was…less historically high than April’s 14.7%. An IHS Markit measure of manufacturing activity contracted, but by less than it had in previous months.
Meanwhile, there have been a slew of bad reports about the global recovery. The International Monetary Fund, Congressional Budget Office, and World Bank each predicted varying degrees of economic carnage for the remainder of 2020. Remember when we all thought there would be a V-shaped recovery? Now instead, it is looking a lot longer, more protracted, and slow.
