US labor market improvement stalling; second wave of layoffs seen
Jun 20 2020
While the Labor Department reported Thursday that the number of people receiving unemployment benefits has plateaued at 20.5 million, there are millions more in limbo as they wait for their applications to be processed.
Although reopening is underway throughout the country, the number of new applications for benefits fell by just 58,000, the Labor Department said.
Americans lost their jobs at a frenetic pace beginning in March, as unemployment figures rocketed to never-before-seen totals, but they are not coming back almost as quickly, data from the U.S. Department of Labor shows.
The weekly jobless claims, the most timely data on the economy's health, remain incredibly high even though employers hired a record 2.5 million workers in May as businesses reopened after shuttering in mid-March to slow the spread of Covid-19.
Why it matters: While the number of claims has fallen, almost 35 million Americans were receiving or had applied for some kind of unemployment insurance as of June 13.
The pace of job cuts has steadily declined in the three months since the coronavirus struck hard, forcing business closures and sending the economy into recession.
Powell renewed calls for fiscal measures in testimony June 17 via a video link to the House of Representatives Financial Services Committee.
"Then we think, and I think most if not all forecasters think, that will leave us well short of where we were in February".
A quarter of all unemployment claims filed have been from food service employees, the commissioner has said.
"Monetary measures alone will not ensure that the US economy will weather the pandemic".
Payrolls at companies increased by several million last month and consumer spending on cars, restaurant meals and other things soared, exceeding expectations as states loosened restrictions.
Labor Department figures showed that the largest increases in initial claims were in California (+27,202), MA (+17,512), and Oklahoma (+17,149).
In addition to California, unadjusted continuing claims rose nearly 110,000 in Texas and OR saw a more than 144,000 jump. This is down by 62,000 compared to the previous week, which was revised down to 20.606 million.
In the week ended June 13, states reported 760,526 initial claims for Pandemic Unemployment Assistance, the federal program that extends unemployment benefits to those not typically eligible like the self-employed.