WASHINGTON (Reuters) – The number of Americans filing for unemployment dropped to under 2 million last week for the first time since mid-March, but remains surprisingly high, as companies adapt to an environment that has been significantly changed by COVID-19.
FILE PHOTO: people have lost their jobs, wait in the line to file for unemployment after the outbreak of the corona virus disease (COVID-19) is an Arkansas Workforce Center in Fayetteville, Arkansas, USA, U. s., 6. April, up to the year 2020. REUTERS/Nick Oxford/file photo
Other data on Thursday showed, the jump in the trade deficit in April, as the pandemic upended the global flow of goods and services, pushing exports to a 10-year low. The report reinforces the expectations of economic recovery from the feline corona virus crisis would be a long slog, as well as the activity seems to be stabilizing again.
“The good news is, the Land around the corner, in the corona-virus-pandemic, but the bad news is, the growth of the economy, it will only limp along, if it has, millions and millions of unemployed workers who can’t support themselves and running out of benefits to pay the bills,” said Chris Rupkey, chief economist at MUFG in New York city.
First claims for state unemployment benefits fell 249,000 on a seasonally adjusted 1.877 million euros for the week in may ended in a 30, the labor Department said. Economists by Reuters, respondents predicted new claims would fall to 1.8 million in the last week.
Although the claims have declined since hitting a record 6.867 million, at the end of August, they are three times larger than at its peak in the years 2007 to 2009 recession. Nevertheless, the report suggested that the worst was over showed for the labour market, in combination with data on Thursday that a smaller-than-expected decline in private sector payrolls in September.
The surveys have also shown the confidence of consumers, industry, and services are stabilizing, albeit at a low level in may, indicating the downturn, triggered by a near-shutdown of the country in mid-March-to-control-the-spread-of-the-COVID-19 respiratory disease was the bottom of the valley. Many shops had back in mid-may open.
“The stubbornly high number of unemployment claims, comes a second wave of layoffs, as the company has to navigate weak demand, as well as some outdated residues in the state, the unemployment offices have been overwhelmed early on by the flood of applications already in the shutdown.
BoeingBA.Nand a pipeline operator Energy TransferET.N) have announced layoffs, for a while, some big retailers such as JC Penney, and a high-end chain Neiman Marcus, have declared bankruptcy. State and local governments, whose budgets were decimated by the COVID-19 name, are also shedding jobs.
“The evidence that unemployment, the spread to other industries and larger companies is clear, and that may slow down or even temporarily reverse our progress,” said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia.
The government’s closely monitored employment report for may, expected on Friday, brokers is likely that payrolls will fall, with 8 million euros a year, after a record 20.537 million, a jump in April, according to a Reuters poll of economists.
The unemployment rate rocket is likely to 19.8%, a post-World war Two record with a time of 14.7% at the end of April.
TRADE DEFICIT WIDENS
A separate report on Thursday from the Commerce Department showed the trade deficit jumped from 16.7% to $49.4 billion euros at the end of April. Exports to a record 20.5%, to $151.3 billion euros, the lowest level since April 2010 fell. The offset of a data record with a 13.7% decline in imports to $200.7 billion.
Shares were traded on Wall Street lower after recent strong gains. For The u. s. dollar .DXY stood firm against a basket of currencies. U.S. Treasury prices fell.
To analyze the weekly initial jobless claims report, the latest data on the economy, the health and that could be difficult in the coming weeks. First, receivables are recognized when a person submits a first claim for unemployment benefit. Once approved, you will be no further claims, and are reported with a one week delay.
As part of the fiscal package, worth almost $ 3 trillion, and the U. government. s. is a pandemic, a strong eligibility for unemployment benefits expanded to include the self-employed and independent contractors, are affected by the COVID-19 -.
These workers do not apply for regular state unemployment insurance, and the file under the pandemic unemployment assistance (PUA) program.
The government has also expanded a regular state unemployment benefits by another 13 weeks under a program called ” pandemic emergency unemployment benefits (PEUC). About 30 States now report that the PUA be reported to pay claims on a weekly basis, but the PEUC, with a two-week delay.
Neither the PUA nor the PEUC, the initial claims and continuing claims figures, economists say, is roughly the tragedy that drives caused by COVID-19. Last week, 623,073 the PUA applications on-top-of-the-10.741 million were processed during the week of may 16 ended.
Further claims, the number of people, which increases unemployment benefits after an initial week of aid, 649,000 of the 21.487 million in the week ending may 23. Economists believe that any further claims to a peak of 24.9 million euros at the beginning of may.
A total of 30 million people received unemployment benefits under all programs in the week ending September 16, slightly down from 31 million euros in the previous week.
“The “business” with the re-opening of the path, and the impact on employment may not be as smooth as hoped,” said James Knightley, chief international economist at ING in New York city.
Reporting by Lucia Mutikani; editing by Chizu Nomiyama and Paul Commented