Economic Report: Jobless claims rise over 2 million again but data offer glimmer of hope

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The numbers: More than 2.1 million unemployed Americans applied for state unemployment benefits in the week ended May 23, the Labor Department said Thursday. That’s down from 2.4 million claims in the prior week. It is the 10th straight week with first-time claims of over 2 million. Economists surveyed by MarketWatch had been looking for 2.12 million new claims. A new federal relief program for so-called gig workers like Uber UBER, +0.22% drivers, totaled 1.2 million last week.

The number of people already collecting economic benefits, known as continuing claims, fell 3.86 million to 21.05 million. That’s down from a record 24.9 million in the prior week. These claims are reported with a one-week lag.

What happened: Since the coronavirus pandemic and lockdowns started in mid-March, about 48 million people have applied for jobless benefits, on an unadjusted basis. Initial claims have fallen steadily since hitting a record 6.9 million in the week ended March 28.

The drop in continuing claims suggests some unemployed workers are finding work.

Big picture: The unemployment rate shot up 14.7% in April and is expected to rise further in May. The key is whether these job losses are temporary or permanent.

What are they saying? “The decline in continuing claims is encouraging, signaling at least some people are finding jobs or are being rehired as the economy is reopening. Even so, labor-market conditions remain weak and layoffs are ongoing. We think new protocols related to virus containment will continue to restrict activity and layoffs, though they may continue to moderate, will remain high in the near term,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

Market reaction: Stocks were modestly higher in mid-morning trade. The S&P index SPX, +0.53% rose 6.5 points while the Dow Jones Industrial Average DJIA, +0.42% was up 34 points.

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