Record U.S. jobless claims wipe out post-Great Recession employment gains

A record 26 million Americans likely sought unemployment benefits over the last five weeks, confirming that all the jobs created during the longest employment boom in U.S. history were wiped out in about a month as the novel coronavirus savages the economy.

Thursday’s weekly jobless claims report from the Labor Department will add to a growing pile of increasingly bleak economic data. It will come amid rising protests against nationwide lockdowns to control the spread of COVID-19, the potentially lethal respiratory illness caused by the virus.

President Donald Trump, who is seeking a second term in the White House in November’s general election, has been anxious to restart the paralyzed economy. Trump on Wednesday applauded steps taken by a handful of Republican-led states to begin reopening their economies, despite warnings from health experts of a potential new surge in infections.

Initial claims for state unemployment benefits probably totaled 4.2 million in the week ended April 18, according to a Reuters survey of economists. Still a figure that would have been seen as unimaginably high less than two months ago, it would be lower than the previous week’s 5.245 million. Estimates in the survey for Thursday’s data were as high as 5.50 million.

Based on the median forecast, last week’s claims data would bring the cumulative unemployment benefits claims to roughly 26.2 million since the week ending March 21, representing about 16% of the labor force. The economy created 22 million jobs during the employment boom which started in September 2010 and abruptly ended in February this year.

The labor market slaughter adds to collapsing oil prices, retail sales, manufacturing production, homebuilding and home sales in reinforcing economists’ contention that the economy entered recession in March.

With claims expected to gradually decline in the coming weeks as more small enterprises access funding, attention will shift to the number of people on unemployment benefits rolls.

The so-called continuing claims data is reported with a one-week lag and is considered a better gauge of unemployment. Continuing claims are forecast to have jumped to a record 16.476 million in the week ending April 11 from 11.976 million during the week ending April 4.

Record U.S. jobless claims wipe out post-Great Recession employment gains, Reuters, Apr 23