Even as coronavirus-induced restrictions ease, weekly jobless claims are continuing to stay at record-high levels.
According to the Department of Labor, 1.48 million Americans filed initial jobless claims last week — worse than the 1.35 million predicted by Wall Street. This marks the 14th straight week that weekly petitions have exceeded 1 million.
Although this was the second consecutive week that jobless claims were worse than economists’ projections, there are also some signs of recovery. For this first time in two months, the number of individuals receiving unemployment benefits fell below 20 million this week, with 19.5 million on the unemployment rolls, a decline of 767,000 week-on-week. Further, initial claims have continued to drop since the peak of 6.9 million in late March, signaling that the worst for the American labor force may have passed.
In the May unemployment report, released on June 5, the Bureau of Labor Statistics reported a gain of 2.5 million in nonfarm payrolls and the unemployment rate fell to 13.3%. This was better than projected: Economists had been expecting a loss of 8.3 million and an unemployment rate of 19.5% — which would have been the worst figure recorded since the Great Depression. The May surge marked the largest single-month increase in employment in the U.S. since at least 1939. However, in the retail space, one of the hardest-hit by the pandemic, companies gained 368,000 jobs, following a loss of 2.3 million posts in April.
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Nevertheless, job losses in the retail sector do not appear to be over yet. Just today, Macy’s announced that it would reduce its corporate and management headcount by approximately 3,900, a reduction of roughly 3% of its overall workforce. On June 22, bankrupt retailer JCPenney announced the closure of another 13 units, in addition to 136 closures announced earlier this month; in its restructuring, the company will slash thousands of jobs.
According to the National Bureau of Economic Research, the U.S. economy entered a recession in February, prior to lockdown measures going into effect in March. However, even though all 50 states have begun to reopen, some states have seen a recent spike in new COVID-19 cases, among them Florida and Texas — indicating that further closures could come in some areas. Further, economists are projecting that it will take years for the economy to recover from the tens of millions of jobs shed amid the public health emergency.