In the last five weeks, 26 million Americans have filed for unemployment claims as layoffs persist amid the coronavirus pandemic.
While the latest report showed a third weekly decline since jobless claims peaked at nearly 7 million in the last week of March, the continued elevated losses are staggering. Cumulative claims in the last five weeks are roughly equivalent to filings between January and October 2009, the worst 10 months of the Great Recession.
"At this stage, the signs are not promising," Seema Shah, chief strategist at Principal Global Investors, told Business Insider. While initial claims have declined from the peak, continuing claims are still growing, showing that people remain out of work despite support from the US government, she said.
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How long people remain out of work is where much of the focus will be from now on, according to Shah. "The more unemployment rises, the slower the eventual recovery may be," she said.
Going forward, economists will continue to monitor weekly jobless claims as they provide one of the best snapshots of what's currently happening in the US economy. In addition, all eyes will be on the April jobs report, released in early May. That report is expected to show a huge spike in the unemployment rate, reflecting the worst weeks of jobless claims from the coronavirus pandemic.
Here's what five economists said about Thursday's weekly jobless claims report:
"American labor dynamics deteriorated further for the week," Joe Brusuelas, chief economist at RSM, wrote in a Thursday note. In addition, the losses this week imply that the "near real-time unemployment rate has increased to 21.1% at a minimum," he said.
"The magnitude of the shock to the labor market is so large that it is difficult not to begin thinking about the wage picture for American workers going forward," said Brusuelas, adding that wage growth was sluggish in the previous business cycle.
"While we anticipate a quotient of wage stickiness among the two lower quintiles of income earners, it is difficult to believe that there will not be significant wage flexibility up the income ladder that will result in wage deflation and an outright decline in the overall level of prices over the next two years," he said.
"26 million workers have filed for unemployment insurance since March 21st. Let that sink in," economist Jason Reed, assistant chair and teaching professor of finance at the University of Notre Dame's Mendoza College of Business, told Business Insider.
"The toll on opening the economy are lives. Fiscal policy, like the CARES act and the new relief bill being discussed in congress, are meant to help mitigate the effects of our collective decision to stay at home," he said.
He continued: "Congress can't bring back Americans lost to the coronavirus but they can, eventually, bring back jobs. Although the numbers are bleak, there is certainly light at the end of the tunnel."
"With the pain spreading from retail and hospitality to other sectors less than half of the working age population of America will be earning a wage by May," James Knightley, ING's chief international economist, wrote in a note Thursday.
"As we scramble to look for positives, we can say that this is the third consecutive fall in initial claims," he said. "Nonetheless this is an awful outcome (today's number is more than six times higher than even the worst figure during the peak of the Global Financial Crisis in 2009) and underlines the economic pain for US households brought about by the pandemic."
"It will be interesting to see what happens in the states that are re-opening parts of their economy from this weekend – Georgia, Tennessee, South Carolina and Florida. We would assume jobless claims will fall back sharply here, but if consumers remain reluctant to go shopping or visit a restaurant due to lingering Covid-19 fears, then employment is not going to rebound quickly," he said, adding, "as such it would be another signal that a V-shaped recovery for the US economy is highly unlikely."