New York (CNN Business)More than 40 million Americans have filed for first-time unemployment benefits since the coronavirus pandemic forced the US economy to shut down in March. One in four American workers has filed for unemployment insurance.
Another 2.1 million people filed initial jobless claims last week on a seasonally adjusted basis, the Department of Labor reported Thursday morning.
It was the tenth-straight week in which claims were in the millions. America had never recorded a single week of 1 million jobless claims prior to the coronavirus crisis.
Weekly claims hit their peak at the end of March and have declined every week since then. Although the peak of the jobless wave has passed, at least for now, the state of the US labor market remains dire. State labor departments across the country continue to struggle to process the millions of claims. Before the pandemic, weekly claims were around 200,000.
Stripping out the seasonal adjustment, which would have accounted for a larger increase, 1.9 million people applied for first-time benefits last week. During more normal economic times, the seasonal adjustment helps clarify the data. But given the pandemic mass layoffs, the adjustments actually distort the picture.
In addition to claims for regular unemployment benefits, 1.2 million Americans filed for pandemic unemployment assistance last week. That program allows for out-of-work people who don't qualify for normal unemployment benefits, such as freelancers, to receive government jobless assistance.
While American workers are struggling in this unprecedented situation, states are becoming concerned about fraudulent behavior. The Maine Labor Department said that sharp increases of claims for state and federal benefits could be linked to impostor fraud.
The number of people claiming regular unemployment benefits for consecutive weeks fell to 21.1 million. It was the first decline in continued claims since the start of the pandemic. Economists will keep a close eye on this number in the coming weeks. If it continues to decline, the US labor market may have turned a corner.
That said, the improvement came too late to help the May jobs report.
The Bureau of Labor Statistics' report on the US jobs market, which is due next Friday, is based on a survey that closes around the middle of the month. May's numbers are expected to be dire, with another 7.5 million jobs lost and an unemployment rate near 20%. In April, the US economy shed 20.5 million jobs and the unemployment rate climbed to 14.7%.
And if initial jobless claims plateau in the millions and continued claims don't decline steadily, "it may signal that relaxed state-mandated restrictions alone aren't enough to staunch the flow of unemployed Americans," said Daniel Zhao, senior economist at online hiring platform Glassdoor.
For policy makers, it's time to consider how many of the laid-off workers will be unemployed for the long term.
Economists, politicians and workers have high hopes that people will be able to return to work as the US economy reopens. But this reopening will be staggered and unsynchronized. Some states will move ahead faster than others, just like some industries will be revived quicker.
Jobs have been lost across the board.
The hospitality industry, which accounted for the bulk of jobs lost in April, is expected to be scarred for the long-term by the pandemic. It could take consumers some time before they are willing to go out to bars and restaurants again.
Unemployment claims don't equal jobs lost, as the two data sets are based on different surveys.
