US jobless claims remain in the millions for 8th straight week

The number of Americans seeking unemployment benefits remained in the millions for an eighth straight week as the economy continued to reel from the coronavirus pandemic.

Initial jobless claims in state programs totalled 2.98 million in the week ended May 9th, US Labour Department figures showed on Thursday, following 3.18 million the week before. While filings have eased for a sixth straight week, they failed to decline as much as economists had projected, with a median estimate of 2.5 million.

US stock futures extended losses following the report, while 10-year Treasury yields remained lower.

With the latest numbers, a total of 36.5 million applications for unemployment insurance have been filed since the virus began shutting down businesses in mid-March. That’s close to the level of all claims filed during the last recession, which ran for 18 months.

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Continuing claims - the total number of Americans already receiving unemployment benefits - increased to a record 22.8 million in the week ended May 2nd. That sent the insured unemployment rate, measuring this figure as a share of the total eligible labour market, to 15.7 per cent for that period.

Devastating impact

The worse-than-expected data underscore the ongoing devastating impact of the coronavirus as dine-in restaurants and retailers remain largely closed and concerned Americans stay inside rather than spend. Federal Reserve chairman Jerome Powell on Wednesday outlined a more-troubling economic scenario posed by the possibility of mass bankruptcies and unemployment.

“Long stretches of unemployment can damage or end workers’ careers as their skills lose value and professional networks dry up, and leave families in greater debt,” Mr Powell said in remarks to a virtual event hosted by the Peterson Institute for International Economics. “The loss of thousands of small and medium sized businesses across the country would destroy the life’s work and family legacy of many business and community leaders and limit the strength of the recovery when it comes.” – Bloomberg