COVID-19’s impact on the U.S. labor market will be in focus when the U.S. Labor Department releases weekly initial jobless claims data Thursday morning.
Another 2.1 million Americans are expected to have filed for unemployment benefits in the week ending May 23, according to economists surveyed by Bloomberg. In the prior week, 2.438 million initial jobless claims were filed bringing the nine-week total to 38 million.
Continuing claims, which lags initial jobless claims data by one week, will likely total 25.5 million, up from the prior week’s record 25.07 million.
After hitting a record in the week ending March 28, the weekly initial jobless claims figure has been on a steady decline. However, economists have been paying close attention to the Pandemic Unemployment Assistance (PUA) program figures, which include those who were previously ineligible for unemployment insurance such as self-employed and contracted workers.
In the week ending May 16, the Labor Department reported 2.2 million initial PUA claims; however, it was revealed that there was a data error in Massachusetts’ reported figures.
“The 2.2 million in new claims reported for last week was a reporting error: the actual number was closer to 1.2 million. More than a dozen states have not reported their initial PUA claims and could be a source of increase in coming weeks,” UBS economist Seth Carpenter explained in a note May 22.
The Bureau of Labor Statistics will release the May jobs report June 5, and the unemployment rate is expected to have skyrocketed to 19.5% from 14.7% in April.
“Since the May employment report reference period started, roughly 15.8mn initial jobless claims have been filed, 10.9mn through regular state programs and 4.9mn in PUA,” Nomura economist Lewis Alexander wrote in a note May 22.
The employment crisis in the U.S. will likely weigh on the economy for some time, according to Goldman Sachs.
“The U.S. unemployment crisis will not stand in the way of a near-term economic recovery but is also unlikely to go away quickly. Although the uncertainty is unusually large, we still see the U.S. unemployment rate around 8% in late 2021, well above the levels in most other advanced economies,” the firm wrote in a note Tuesday.
As of Wednesday afternoon, there were 5.63 million coronavirus cases and 351,800 deaths worldwide, according to Johns Hopkins University data. In the U.S., there were 1.64 million cases and 99,100 deaths.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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