Another 2.44 million Americans filed for initial unemployment benefits last week, bringing the total number of people who lost their job so far during the coronavirus pandemic to almost 40 million.
The weekly figures (40 million people lost their jobs), released Thursday by the Department of Labor, come amid a slew of bankruptcies and as more companies announce layoffs.
While the month of May still represents a staggering total of job losses, the number of unemployment benefit claims has been in gradual decline after hitting a peak of 6.8 million for the week ending March 28.
Continuing claims, or the number of people who are still filing for ongoing weekly benefits, is now at 25 million people, having hit a record 22.8 million for the week ending May 2.
“With a ninth straight week of new weekly jobless claims being counted in the millions, although at a lower level than before, one might be tempted to focus on the continuing decline,” said Mark Hamrick, senior economic analyst for Bankrate. “But at 2.4 million new claims last week, this number of new claims alone is about equal to the population of the city of Houston, Texas.”
State labor departments have been working since the beginning of the pandemic to clear their backlogs of jobless claims, after the surge in unemployment crashed systems that were ill prepared for such volume. Newly laid-off workers have overwhelmed unemployment offices in numerous states, leading to frustration and delays in applying for and receiving benefits.
While each state has its own story, the general themes revolve around budgets cut by state legislatures and starved by the federal government; and old, inefficient systems that can often create more work for applicants and processors.
America continues to face the worst labor market since the Great Depression, with the official unemployment figure already at over 20 million, representing a total loss of all jobs gained since the Great Recession.
40 million people lost their jobs
The current unemployment rate of 14.7 percent is the worst since the height of the Great Depression, when it hit 24.9 percent.
There is little indication that the situation will improve in the short term, with concern growing that despite the gradual reopening of the economy and return to work, the proverbial “V-shaped” recovery may not materialize.
“I think the jobs numbers will be worse before they get better,” Treasury Secretary Steven Mnuchin warned on Tuesday, during a joint appearance before the Senate banking committee with Federal Reserve Chairman Jerome Powell.
Powell, who has estimated that unemployment could reach 25 percent, has said the economy can only fully recover once there is a vaccine.
“Assuming there’s not a second wave of the coronavirus, I think you’ll see the economy recover steadily through the second half of this year. So, for the economy to fully recover people will have to be fully confident and that may have to await the arrival of a vaccine,” the head of the central bank said in an interview with CBS News’ “60 Minutes” that aired on Sunday.
Data for the prior week was revised downwards, after Connecticut said it had misreported its numbers by around 260,000.