Thursday 14 May 2020 1:58 pm

US jobless claims: Nearly 3m more Americans file for unemployment benefits as lockdown slams economy

Another 2.981m Americans filed for unemployment benefits in the week ending 9 May, according to jobless claims data released today by the US Labor Department.

The previous week’s figure was revised higher to 3.18m from 3.17m jobless claims.

Since the coronavirus pandemic hit the US two months ago, more than 36m Americans have filed unemployment insurance claims.

Naeem Aslam, chief market analyst at Avatrade, said: “The US jobless claim data was better than the last week but the initial claims data has influenced the markets. The key takeaway from this economic number is that things are still very bad, but perhaps, we have seen the worse.

“The element that we have seen the worse is already priced in the US equity markets, and this is the reason that we have experienced such a stellar rally for the US stocks.”

Neil Birrell, chief investment officer at Premier Miton, said: “Hard on the heels of Jerome Powell’s downbeat comments on the US economy come initial jobless claims that are worse than expectations, although continuing claims are a bit better than thought.

“Equities have been struggling since Powell spoke and there is nothing in these numbers to provide respite. However, we seem to be immune to such data points, the worry must be that the cumulative effect will become overbearing.”

Richard Flynn, UK managing director at Charles Schwab, said: “The economic data points coming out of the US have rewritten the rules around how the economy moves from expansion to recession. Today’s unemployment claims continue their epic ascent on a cumulative weekly basis; not since the Great Depression has the US job market been in such a sorry state. The unprecedented speed with which the U.S. stock market has moved from all-time highs to deep bear market territory is directly tied to the collapse now underway in the economy.

“The Fed’s actions may be sufficient to keep the economic crisis from becoming a systemic financial system crisis, but this is at its core a health crisis for which the Fed has no direct tools. The stock market’s recent rally has been fuelled by Fed-provided liquidity and is unlikely to be matched by a V-shaped economic rebound.

“While the economic damage of this crisis will be unlike anything most of us have experienced in our lifetimes, when we come out of the depths of this recession, there will be new engines for growth. Longer-term, we will likely see the US economy shift from a consumption-driven to an investment-driven market.”