The coronavirus pandemic has sent shockwaves through the global economy, and investors got another pulse check on employment when the U.S. Labor Department released weekly jobless claims Thursday morning.
After three consecutive weeks of jobless claims in the millions, another 5.245 million Americans filed for unemployment benefits in the week ending April 11. Since June 2009, the U.S. economy added over 20 million jobs. But in just the last four weeks, the number of unemployment claims has reached 22 million.
Economists were predicting 5.5 million jobless claims for the week ending April 11. The prior week’s figure was revised higher to 6.615 million from the previously reported 6.606 million claims.
Continuing claims, which lags initial jobless claims data by one week, hit a record 11.976 million for the week ending April 4 after the previous week’s 7.455 million. Consensus estimates were for 13.26 million continuing claims for the week.
“The waves of millions of workers filing for unemployment insurance continued last week. While this wave may be slightly smaller than the previous two weeks, the labor market is still being battered by a historic storm,” Indeed Hiring Lab's director of economic research Nick Bunker said Thursday in an email. “Whether these workers will be recalled to their former jobs or get hired at new ones is a matter of when the public feels safe returning to a semblance of normalcy. Only then can businesses start to ramp up hiring and the number of jobless workers can start to fall.”
Some economists believe the number of claims will steadily begin falling from previous highs in the coming weeks.
“Jobless claims are peaking at only 5.245 million applications in the April 11 week,” MUFG Chief Financial Economist Chris Rupkey said in an email Thursday.
“The stock market seems to count job layoffs the same way they read the curve of new positive coronavirus cases and think that 5.245 million jobless claims this week is better and lower than the 6.615 million applications last week. The labor market curve is flattening and that's a good thing for the economic outlook as it signifies a recession this time around not a new Great Depression from the 1930s that lasted three and a half years,” Rupkey added.
“While we believe the magnitude of increases in claims have moved passed the peak, the cumulative number is still rising, likely reaching the range of 25 million over the next few weeks,” Morgan Stanley economist Jan Kozak said in a note Wednesday.
Most U.S. states have now implemented “shelter-in-place” orders.
“There is some evidence that states that implemented lockdowns earlier are seeing their claims numbers ease (Pennsylvania, California, New York). However, this is being offset by increased claims in states with more recent lockdowns (Virginia, Georgia),” Nomura economist Lewis Alexander said in a note April 9. “As we move further away from the date of initial lockdowns, claims should begin to normalize somewhat further.”
Certain states got hit harder than others last week as massive backlogs continued to pile up; however, most states saw declining numbers of claims from the previous week. For the week ended April 11, California saw the highest number of initial claims at an estimated 660,000 on an unadjusted basis, down considerably from 918,000 the prior week. New York had an estimated 395,000, Georgia reported 317,000, Pennsylvania had 238,000.
As of Thursday morning, there were more than 2 million confirmed cases and 138,000 deaths worldwide. In the U.S., more than 639,000 people were infected and 30,000 deaths, according to Johns Hopkins University data.
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Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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