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The number of Americans filing new jobless claims last week is expected to have dropped, but millions are still expected to have sought financial help in the midst of the coronavirus pandemic.
Economists estimate the Labor Department will report Thursday that 3.5 million Americans filed initial applications for unemployment insurance last week, down from the roughly 4.4 million claims the week before and the all-time high of 6.86 million applications filed in late March.
If the latest weekly total matches estimates, it will mean 30 million Americans have applied for unemployment in just six weeks, a breathtaking number that exceeds all the jobs created since the Great Recession.
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The latest round of claims also precedes next week’s monthly jobs report which will “likely show a historic drop of nearly 20 million jobs and an unemployment rate in the high teens,” according to Contingent Macro Research.
Many people applying for unemployment insurance likely lost work weeks ago but were only recently able to file claims because state systems have been bogged down or even immobilized by the unprecedented number of applications.
But layoffs and furloughs are also continuing, as businesses struggle amid lingering shutdowns and local and state governments consider job cuts as revenue from sales and income taxes dwindles.
“Based on recent (unemployment insurance) claims and the expectation for a near-complete freeze in hiring, it is not unrealistic to think that the economy may lose 20 million jobs or more in April alone,” Dante DeAntonio, an economist at Moody’s Analytics, wrote in a note to clients. “It is becoming clear that estimated employment losses over the last month will be the largest in history, by a long shot.”
While new claims are expected to continue to slow, Pantheon Macroeconomics wrote in a research note that it thinks job losses are “unlikely to fall below one million per week until late May.” Before the pandemic, roughly 215,000 claims were being filed per week.
Morgan Stanley has forecast that the unemployment rate should top 15% this month. And though it projects that the average jobless rate will hover at 15.7% during the second quarter, it predicts the U.S. will experience a 16.4% unemployment rate in May, “higher than any point since the Great Depression.”
Jobless claims may also continue to grow because the $2.2 trillion federal emergency stimulus package approved in March expanded the number of people who can receive unemployment benefits, including those who’ve gone from full-time to part-time work.
Follow Charisse Jones on Twitter @charissejones
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