The massive wave of US layoffs in the wake of the coronavirus pandemic continued last week, with another 1.5 million people filing for unemployment benefits despite US-wide reopenings and signs of improvement in the economy.
Over the past three months, more than 45 million people have filed initial unemployment claims as businesses have closed their doors and consumers have gone into lockdown.
Last week’s layoffs were just 58,000 below the previous week’s level, which was revised up by 24,000 to 1.56m.
The pace of layoffs has slowed sharply since their peak in the week ending 4 April when a stunning 6.6 million people filed claims. But they remain historically high. Before the Covid-19 downturn, the record number of claims for one week was 695,000 in October 1982.
While claims are falling in most of the US, some states are still experiencing rises. In Arizona, which has recently recorded an increase in coronavirus infections, claims have risen for the past two weeks.
The weekly initial claims figures are not seen as a reliable indicator of US unemployment in part because many people do not make claims when they are laid off, others are disqualified and the huge numbers of claims have led to backlogs that are still filtering into the system.
The number of continuing claims – people covered by unemployment insurance and currently receiving benefits – was 20.5m for the week ending 6 June, giving an unemployment rate of 14.1%.
Officially the monthly unemployment rate in May was 13.3%, down from 14.7% in April – although difficulty collecting data meant the figure was probably 3% higher.
The latest weekly figures come amid signs that the economy is picking up after the initial shock of the pandemic. This week the commerce department said retail sales had boomed in May, rising at a record 17.7% as states reopened.
The number, however, represents a fraction of the sales lost since lockdowns began. On Tuesday, the Federal Reserve chair Jerome Powell warned millions may be out of work for months to come, and that the economy still faced “significant uncertainties”.
The Fed expects the unemployment rate to be around 9.3% by the end of the year, a sharp drop but still two and half times as high as the 3.5% rate recorded in February.
