If you’ve been laid off due to the coronavirus pandemic and are on the job hunt, you’re probably wondering how to explain it on your resume.
Another numbing wave of COVID-19-related layoffs is likely to be reported Thursday but, with all 50 states starting to allow businesses to gradually reopen, economists are looking for some glimmers of hope as well.
Economists surveyed by Bloomberg estimate the Labor Department will report that 1.8 million Americans filed initial applications for unemployment insurance last week, down from 2.1 million the prior week.
That would push total unemployment claims over the past 11 weeks to a staggering 42.5 million. But it also would mark the ninth straight weekly decline since claims peaked at 6.9 million at the end of March. If the trend continues, the figure likely will dip below a million by the end of June, says economist Ian Shepherdson of Pantheon Macroeconomics.
Jobless claims provide the best measure of layoffs across the U.S. but they don’t reflect just payroll cuts. Some Americans seeking benefits have been furloughed while others have seen their hours reduced.
May jobs report
On Friday, Labor is forecast to record eight million net job losses – which includes job cuts and new hiring – in May and an unemployment rate that jumped to an unthinkable 19.5% from 14.7% the prior month. Put simply, the damage is expected to be only somewhat less brutal than April’s report, which featured a record 20.5 million payroll losses and an unemployment rate that shot up from 4.4% in March.
ADP report shows smaller job losses
Payroll processor ADP, however, on Wednesday reported just 2.76 million private-sector job losses for May, below the median nine million estimated by economists surveyed by Bloomberg. That raises the possibility the chances that Labor’s report won’t be as dire as projected as businesses reopen and rehire laid-off employees.
How to survive unemployment: Laid-off workers start side hustles, business ventures to survive amid COVID-19 pandemic
The jobless claims reported Thursday will figure into the June jobs report, which some economists say could represent a turning point in the coronavirus crisis. With all states letting nonessential businesses reopen in phases after shutting them down to contain the pandemic, economist Gus Faucher of PNC Financial Services Group believes job gains will likely resume in June, albeit modestly, after two months of historic losses.
A claims tally Thursday that matches or falls below the 1.8 million median estimate would fuel hopes for such a scenario while a count that tops two million would make it less likely, Faucher says.
“Claims that are meaningfully below (the estimate) would signify we’re finally plateauing” in job losses, says Moody’s Analytics economist Adam Kamins. Initial claims, in fact, could start declining more rapidly as businesses anticipate reopening and become more hesitant to let staffers go, Shepherdson says.
Continuing claims vs. initial claims
An even more significant number to watch in Thursday’s report is continuing claims, which represents the total of Americans receiving benefits – largely reflecting all those unemployed — rather than initial claims, which is made up of those laid off the prior week.
In the week ending May 16, continuing claims fell 3.9 million to 21 million, indicating more people came off the unemployment rolls than joined, Faucher says. Many likely were rehired as state economies reopened while others may have gone back to work for businesses that received forgivable government loans as long as they retained or rehired their workers.
Hot, or not so hot: Can my company require temperature checks? Ask HR
There’s a caveat, however. The drop in continuing claims was largely driven by a 1.4 million decline in California and a 1.6 million decrease in Florida, notes economist Nancy Vanden Houten of Oxford Economics. Both states require the unemployed to file claims every two weeks, and that was an off week. As a result, Shepherdson expects Labor on Thursday to report a rise in total U.S. claims as residents in the two states resumed filing.
Faucher, however, says continuing claims still could fall, and that would be encouraging.
“If we get two weeks of declines, that is significant,” he says.
Despite the positive signs, Moody’s Analytics reckons that only half of those laid off will be rehired in coming months, leaving unemployment at about 10% by year’s end and into 2021.
Read or Share this story: https://www.usatoday.com/story/money/2020/06/03/coronavirus-nearly-2-million-more-jobless-claims-expected-but-layoffs-easing/3128001001/