More than 2.4m Americans made new jobless claims last week, data has shown, as the world’s largest economy continues to shed jobs at a momentous pace during the coronavirus crisis.
The latest figure means that roughly 39m new claims for unemployment insurance have been made in the US since March 21. Unemployment has soared to levels not seen since the Great Depression.
The jobless claims numbers are a sign of the catastrophic effect coronavirus lockdowns are having on the US economy. And they suggests that a recovery may be drawn out.
The number of weekly new jobless claims peaked at 6.9m in the week ending 28 March. That followed 3.3m new claims the week earlier. Graphs have had to be redrawn to account for the unprecedented surge in unemployment.
In the depths of the financial crisis, 800,000 jobs were lost in the worst month. The scale of unemployment suggests the US economy could face longer-term scarring after the pandemic passes.
The Department of Labor today said the insured unemployment rate was 17.2 in the week ending 9 May. That is the percentage of working age people receiving jobless benefits.
US unemployment could hit 25 per cent
It comes after official data released earlier in May showed that US unemployment surged to 14.7 per cent last month as more than 20m lost their jobs. That was its highest rate since the 1930s,
Fed chair Powell earlier this week said US unemployment may peak at 25 per cent this year. He also painted a gloomy picture of the road ahead.
Nancy Vanden Houten, lead US economist at Oxford Economics, said: “Initial claims for unemployment benefits continued their gradual retreat from the late March peak last week but remain more than 10 times greater than the level that prevailed prior to the pandemic.”
She added that the headline figure could be understating reality. This is because it does not include individuals receiving benefits under state and emergency programs.
“In the week ended 9 May, 27.3m individuals were receiving benefits, more than double the great recession [financial crisis] peak of 11.8m,” she said.