The deluge of millions of unemployment insurance (UI) claims continued last week. While the flow of claims slackened, each week is still a new wave of millions more Americans now unemployed. Initial claims for unemployment insurance fell to 4.4 million on a seasonally-adjusted basis, according to the latest figures from the Department of Labor for the week ending April 18, 2020. The prior week’s figure was revised down to 5.24 million from 5.25 million.
This is the fourth consecutive drop in UI claims since the peak at the end of March. However, that is little comfort to the 26 million Americans, or 1 in 6 Americans employed in February, who have filed for unemployment insurance since the crisis began. Since February 2010, 22.8 million net jobs have been added to payrolls. The labor market has seen more UI claims in the last five weeks than net jobs added during the ten years after the Great Recession. While the number of UI claims is not directly comparable (UI claims undercount actual unemployed but also don’t factor in new hiring during the crisis), it gives a sense of the magnitude and pace of the crisis.
The fourth straight week of slowing UI claims does suggest that we are past the peak of new claims, but state unemployment offices still report being overwhelmed and the public health crisis hasn’t subsided. While the pace of claims is likely to continue slowing, millions more Americans are likely to file UI claims in the coming weeks.
Importantly, last week included the reference period for the surveys that the Bureau of Labor Statistics will use to generate the April jobs report, to be released on May 8. The influx of millions of unemployed Americans over the last five weeks is likely to push the unemployment rate over 10 percent, but the unprecedented nature of the crisis makes predictions difficult.
Today’s report shows the labor market is almost certainly pushing into new territory, jolting the unemployment rate up above the Great Recession’s 10 percent peak and wiping out more jobs than we’ve gained in the recovery.
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