Economists expect another 5.5 million workers filed for benefits

The coronavirus pandemic has sent shockwaves through the global economy, and investors will get another pulse check on employment when the U.S. Labor Department releases weekly jobless claims Thursday morning.

After three consecutive weeks of jobless claims in the millions, economists are predicting that another 5.462 million Americans filed for unemployment benefits for the week ending April 11. In the week ending April 4, 6.606 million claims were filed, which was a slight decrease from the previous week’s record-breaking 6.867 million.

(David Foster/Yahoo Finance)

Even as consensus expectations are for more than 5 million jobless claims for the week, some economists believe the number of claims will steadily begin falling from previous highs in the coming weeks.

“While we believe the magnitude of increases in claims have moved passed the peak, the cumulative number is still rising, likely reaching the range of 25 million over the next few weeks,” Morgan Stanley economist Jan Kozak said in a note Wednesday.

Most U.S. states have now implemented “shelter-in-place” orders.

“There is some evidence that states that implemented lockdowns earlier are seeing their claims numbers ease (Pennsylvania, California, New York). However, this is being offset by increased claims in states with more recent lockdowns (Virginia, Georgia),” Nomura economist Lewis Alexander said in a note April 9. “As we move further away from the date of initial lockdowns, claims should begin to normalize somewhat further.”

(David Foster/Yahoo Finance)

Certain states got hit harder than others last week as massive backlogs continued to pile up. For the week ended April 4, California saw the highest number of initial claims at an estimated 925,000 on an unadjusted basis, up from 879,000 the prior week. Georgia had an estimated total of 388,000, Michigan had 385,000, and New York reported 345,000.

Meanwhile, market participants should keep a close eye on continuing claims figures, which lag one week behind initial jobless claims data. For the week ending March 28, continuing claims hit a record 7.455 million, and economist predict that number will have soared to 1.326 billion for the week ending April 4.

As of Wednesday afternoon, there were more than 2 million confirmed cases and 132,000 deaths worldwide. In the U.S., more than 613,000 people were infected and 27,000 deaths, according to Johns Hopkins University data.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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