Coronavirus: US weekly jobless claims at 3.8m as unemployment skyrockets
More than 3.8m Americans filed jobless claims last week as unemployment in the world’s biggest economy continues to skyrocket amid the coronavirus pandemic.
The new jobless claims, down from 4.4m the week before, mean roughly 30m Americans have lost their jobs in the last six weeks as states have all but shut down their economies.
Unemployment has surged despite unprecedented fiscal and monetary stimulus. The government has passed stimulus bulls worth around $3 trillion (£2.4 trillion), while the Federal Reserve has slashed interest rates and pumped trillions of dollars into the economy.
Although businesses and workers have been supported, the US lacks a job retention scheme of the sort that has kept unemployment from ballooning in countries such as the UK and Germany.
The dire jobless figures came a day after data showed that the US economy shrank 4.8 per cent in the first quarter. This was the biggest fall since the financial crisis, but estimates for second-quarter GDP have been as bad as minus 30 per cent.
New weekly jobless claims peaked at 6.8m in the week ended 28 March but have remained elevated. In the worst stages of the financial crisis, around 800,000 people lost their jobs over four weeks.
“Initial claims for unemployment benefits continue to subside but remain at levels that seemed unthinkable before the coronavirus pandemic and exceeded expectations in the latest week,” said Gregory Daco, chief US economist at consultancy Oxford Economics.
“The claims data remain consistent with our forecast for job losses of 24m in April and a spike in the unemployment rate to 14 per cent,” he said. “We expect total job losses during the pandemic of around 30m.”
The latest jump in jobless claims adds to the dilemma facing the administration of President Donald Trump and state governors.
Protests over the lockdown have broken out in recent weeks, with Trump himself appearing to endorse them and criticise Democratic governors for “being too tough”.
Some states have started to loosen restrictions while others will do so over the coming weeks.
Richard Flynn, UK managing director at Charles Schwab, said: “In the US, a return to work may lessen job losses and business bankruptcies.”
Yet he said that “it remains unclear when we will get back to some semblance of normality, and, in the meantime, investors will continue with caution”.