Thursday 28 May 2020 2:09 pm

US jobless claims pass 40m as economy staggers under coronavirus

A further 2.1m people in the US filed for unemployment claims last week, bringing the total to more than 40m since mid-March.

Overall, 40.7m people have applied for unemployment benefits in the last 10 weeks, a quarter of the American workforce, according to new data from the US labor department.

Although the new total represents the eighth consecutive fall in weekly claims since the peak of 6.9m in March, the level is still far above previous highs.

In contrast, the highest monthly jobless claims figure during the 2008-2009 financial crisis was 800,000.

The dire new figures came as the US passed another unwelcome milestone, with 100,000 coronavirus deaths now confirmed in the country.

Despite some non-essential businesses beginning to reopen, the weekly figure only showed a small drop from the previous total of 2.4m.

However, in rare glimpse of hope, jobless continuous claims, a record of those who have been collecting benefits for two weeks or more, fell 4m to 21m.

Richard Flynn, managing director at Charles Schwab, said: “Initial jobless claims have continued to tick down, but still-high unemployment numbers are weighing heavily on individual states’ labour forces.

“While many workers will get their jobs back, some will not as temporary layoffs become permanent. 

“In response, the Fed and Congress are providing relief to build a bridge between the current economic downturn and the potential recovery. 

“However, the longer the current downturn lasts, the more risk there is to the economy’s ability to bounce back because recessions tend to destroy productive capacity”.

Artur Baluszynski, head of research at Henderson Rowe, said the figures represented “the worst contraction in employment since the Great Depression”.