More than 3 million Americans applied for unemployment benefits last week, raising to more than 42 million the number of workers who have lost jobs since thecrippled the economy.
Some 2.1 million people filed for unemployment benefits in the week ending May 23, the Labor Department said Thursday. Another 1.2 million applied for Pandemic Unemployment Assistance, a new federal program expanding jobless aid to self-employed and gig workers.
“The U.S. economy is suffering its most traumatic job loss in history, with twice as many Americans put out of work over the last two months than during the entire Great Recession,” Oxford Economics analysts wrote in a research note. “Sadly, more pain awaits in May. But labor market conditions should start to improve thereafter as shuttered businesses reopen.”
Still, there are hints of an economic recovery in the weekly numbers, experts say. The number of initial unemployment claims has been dropping for eight straight weeks. And the number of workers who are receiving unemployment benefits dropped by 3.9 million from May 9 to May 16.
“The decline in continuing claims is encouraging, signaling at least some people are finding jobs or are being rehired as the economy is reopening,” Rubeela Farooqi of High Frequency Economics told investors in a report.
The hit to the economy has been severe. The U.S. gross domestic product — the total of all economic activity — shrank by 5% in the first quarter, according to a new estimate released Thursday by the Commerce Department.
The big question on policymakers’ minds is how quickly spending bounces back as businesses reopen, and how many workers who have lost jobs or been furloughed during the coronavirus crash will return to work. About 80% of those who became unemployed in April expect to bewithin six months, according to Labor Department figures.
However, most economists see the jobs numbers getting worse before they get better. The unemployment rate, currently at 14.7%, is expected to hit Great Depression-era levels of 25%, according to Goldman Sachs.
The Associated Press contributed to this report.