Another 2.44 million Americans applied for jobless benefits last week, more or less in line with market forecasts. 38.6 million people have applied for benefits since the escalation of the coronavirus pandemic in March. While the claims numbers are unprecedented in pre-pandemic times, last week marks the seventh week of consecutive decline from the peak of 6.9 million claims seen in late March.
- Claims for the week ended May 09 came in at 2.44 million vs. 2.69 million the week before.
- Last week’s claims were revised downward from 2.98 million to 2.69 million.
- The total number of people still unemployed as a result of the pandemic came to 25.07 in the week ended May 09, up 2.52 million from the week before.
Claims in California rose 33,448, marking the largest increase of any state last week. Meanwhile, the largest drop in claims was in Georgia with a drop of 66,224 claims from the week before. Approximately 25 million people are currently unemployed, with an additional 2.4 million under other assistance programs.
2.4mln Americans filed jobless claims last week, a slight dop from 2.7mln the prev week, bringing nine-week total since virus outbreak to 38.6mln. pic.twitter.com/POByvFKVZr
— Holger Zschaepitz (@Schuldensuehner) May 21, 2020
The four-week average of claims rose 2.3 million to 22 million claims as states continue to submit their jobless claims data. While states have begun to reopen, the rate of current unemployment has actually grown in the last week.
MUFG Union Bank chief financial economist Chris Rupkey stated:
“Net, net, the states may be opening back up, but the labor market is still closed for millions across America and the loss of the income and spending of those without jobs will be a considerable headwind for this economic recovery.”
The coronavirus has shut down massive portions of the US economy, and it remains to be seen how many businesses will fail to recover now that states are beginning to reopen. A recent survey showed that over 25% of retailers are unsure of whether their business will survive until holiday season, with brick-and-mortar retailers suffering major losses amid the lockdown. Retail sales saw its worst month ever in April.
While many Americans are claiming benefits under furlough, meaning their jobs are likely waiting for them when the lockdown lifts, it’s likely that continuing unemployment will remain high in the coming months and perhaps years as the pandemic continues to unfold.
Gold prices have seen little reaction to the in-line jobless claims figures, facing some slight selling pressure following the joint release of the claims data and a report on manufacturing from the Philadelphia Fed indicating sub-expectation recovery. Spot gold last traded at $1,734.52/oz, down -0.67% with a high of $1,753.08/oz and a low of $1,731.67/oz.
The latest report from the manufacturing sector indicates that while the six-month outlook remains upbeat, current conditions are still extremely poor.