American jobless numbers post first drop of Covid-19 pandemic

Continuing claims for benefits in state programmes fell to 21.1 million for the week ended May 16

In this illustration, a Covid-19 Unemployment Assistance Updates logo is displayed on a smartphone on top of an application for unemployment benefits, in Virginia. New US claims for unemployment benefShow more

US states’ jobless rolls shrank for the first time during the coronavirus pandemic in a sign people are starting to return to work, even as millions more Americans filed for unemployment benefits.

Continuing claims, which tally Americans’ ongoing benefit claims in state programmes, fell to 21.1 million for the week ended May 16, Labor Department figures showed Thursday. Those data are reported with a one-week lag. That suggests the job market is starting to rebound as businesses reopen. Analysts had expected an increase in continuing claims.

Initial jobless claims for regular state programs totaled 2.12 million in the week ended May 23, to bring the 2 1/2-month total above 40 million. The median estimate in a Bloomberg survey of economists called for 2.1 million claims.

While the latest initial-claims tally was down from the prior week’s 2.45 million and marked the eighth straight weekly decline, it’s still far above the 212,000 average of initial claims in the first two months of 2020 and the pre-pandemic record of 695,000.

Next week’s May jobs report is forecast to show an unemployment rate of around 20 per cent, the highest since the Great Depression, when it peaked at an estimated 25.6 per cent.

Thursday’s report also showed that filings under the separate, federal Pandemic Unemployment Assistance program -- which expands unemployment benefits to those not traditionally eligible, such the self-employed and gig workers -- fell to 1.19 million from 1.25 million on an unadjusted basis, covering 32 states. The prior week’s figure was revised lower by about 1 million due to an error by Massachusetts.

The latest week’s figure for the federal pandemic claims brought the total number under federal and state programmes to 3.11 million last week, down from 3.43 million the prior week.

Total continuing claims under all state and federal programs -- which provides the broadest look at the number of Americans claiming unemployment benefits -- rose to 31 million in the week ended May 9 from 27.3 million. That number isn’t adjusted for seasonality and other factors.

A separate report Thursday showed US orders for durable goods sank sharply for a second month in April as the pandemic wrecked havoc on the manufacturing industry.

State unemployment offices have struggled to keep up with record demand for benefits amid the economy’s sudden stop and wave of layoffs since mid-March. Many applicants have waited on edge for the payments without receiving them.

California, the most populous state, said Wednesday it’s seeking 1,800 additional staff to help process claims, joining about 3,000 current and temporary employees working on the issue. The state said 700 employees worked over the Memorial Day weekend, particularly to process claims that arrived via paper.

The weekly federal report has been marred by data errors and quirks recently, with mistakes from Connecticut and Massachusetts swinging the national figures and California distorting the continuing claims because of the biweekly schedule for residents to file.