- The median economist forecast for jobless claims in the week ending May 9 is 2.5 million, according to Bloomberg data.
- If Thursday’s report from the Labour Department is near the estimate, it will mark another consecutive week of declining claims. It will also mean that more than 35 million Americans have been laid off in just eight weeks.
- “While there are glimmers of hope as a reopening tentatively gets underway, the damage wreaked on the economy will take a long time to repair,” said James Knightley, chief international economist at ING.
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Economists expect that the number of Americans filing for unemployment fell again last week, yet remained elevated at a high level as coronavirus-induced layoffs continue.
The median economist estimate for jobless claims in the week ending May 9 is 2.5 million, according to Bloomberg data.
If Thursday’s report is near estimates, it will be an improvement from the previous week, when 3.2 million Americans filed for unemployment, according to the Labour Department.
It would also mean that in eight weeks, more than 35 million Americans will have lost jobs amid the economic fallout caused by the coronavirus pandemic.
While dwindling weekly jobless claims are a step in the right direction, economists still point out that millions of Americans filing for unemployment benefits each week is unprecedented. Even in the worst week of the great recession, only 665,000 people filed a claim for unemployment.
“If the current rate of decline continues, claims will dip below 1M in the second or-more likely-third week of June,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note last week, adding that the level would still be above the worst week of the Great Recession.
Continued high unemployment doesn’t bode well for the US economic recovery. On Friday, the April jobs report showed that the US lost a record 20.5 million jobs during the month, and that the unemployment rate spiked to 14.7%, the highest since the Great Depression.
Economists expect that report underestimated the true economic pain of sweeping lockdowns to contain the coronavirus pandemic, and that there still may be worse to come for the US economy even as some states start to reopen.
“While there are glimmers of hope as a reopening tentatively gets underway, the damage wreaked on the economy will take a long time to repair,” said James Knightley, chief international economist at ING.
He continued: “Given ongoing social distancing for several more months, lingering consumer caution and the legacy of nearly 40 million jobs lost, we see little prospect of a V-shaped recovery. Even with additional fiscal support, the lost economic output may not be recouped until early 2023.”