The Labor Department’s weekly jobless claims report, the most recent data on the health of the economy, could also provide early clues to how quickly companies re-hire workers when they reopen, and to the success of the government’s wage protection program (PPP).
“None of these states had a system in place to handle the unprecedented number of requests at once, so there are backlogs,” said Steve Blitz, chief economist for the United States at TS Lombard at New York. “We are continuing to read about companies that are downsizing and these are companies that were not immediately affected by the mandatory contraction of COVID-19.”
A large shutdown of the country in mid-March to contain the spread of COVID-19 resulted in the worst job market since the Great Depression and sapped the economy in general.
Initial claims from the state unemployment benefit totaled probably 2.4 million seasonally adjusted data for the week ended May 16, according to a Reuters survey of economists. Data from the previous week should be revised to show that claims have dropped significantly from the $ 2.981 million previously reported after Connecticut said it had misreported its figures.
Claims have gradually declined since reaching a record $ 6.867 million in the week ended March 28. These workers are generally not entitled to regular unemployment insurance, but to obtain federal assistance for job losses related to the coronavirus, they must first apply for state benefits and be refused.
Last week’s deposits would bring the number of people who have filed for unemployment benefits to about 38.9 million since March 21. Economists warn that this figure is not the number of jobs lost due to the pandemic due to technical and procedural difficulties at state unemployment offices.
They also noted that this number could include people who have since found employment.
Refund data last week covered the week in which the government investigated establishments for the non-farm payroll portion of the May employment report. According to Reuters’ estimate, claims likely fell by 2 million between the weeks of the April and May inquiries. The economy lost a record 20.5 million jobs in April.
With the initial number of claims somewhat skewed by processing problems, attention has focused on the number of people who continue to receive unemployment benefits.
These so-called continuous claims figures are reported with a lag of one week, but are considered a better measure of the labor market.
The continuation of the allegations could also provide insight into the speed of the economic recovery. They can also assess the ability of companies to get people out of unemployment or keep workers on their payroll when they access their share of a nearly $ 3 trillion historic tax package, which offered loans that could be partially canceled if used for employee wages.
“More recently, continuing claims have plateaued and suggest that we may see an early sign that employers are recalling employees as states begin to reopen,” said Sam Bullard, senior economist at Wells Fargo Securities in Charlotte, in North Carolina. “The focus should continue to be on continuing demands, which provide a better idea of the challenges facing the unemployed and also a glimpse of the blow to GDP growth. “
According to the Reuters poll, continuing claims rose only 456,000 to a record 22.833 million for the week ending May 2. They are expected to increase to 24.765 million in the week ending May 9.
Report by Lucia Mutikani; Editing by Chizu Nomiyama
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