A further 1.5m Americans have filed new unemployment claims in the last week, bringing the total to 44m. The number of first-time unemployment claims was 1.54m last week, the lowest level in 12 weeks, according to data released by the US Labor Department.
It brings the 12-week total to 44m, meaning more than a quarter of American workers has lost a job during the pandemic. However, unemployment filings fell from the near 1.9m last week, and has been on a steady decline for nine weeks.
The federal Pandemic Unemployment Assistance programme, which provides support for the self-employed, had 705,676 new applications, down slightly from 796,813 the week before.
Although US jobless claims have eased somewhat, the unemployment rate for the week is still at historic levels. As of last week it stood at 14.4 per cent, a 0.2 per cent fall from the previous week’s revised rate. Last week, employment figures for May confounded investors as it dropped to 13.3 per cent.
Analysts had predicted unemployment would surge to 20 per cent, but the encouraging figures suggest the worst of the pandemic is behind the US and people are starting to return to work.
The new figures come after the Federal Reserve yesterday predicted a 6.5 per cent decline in GDP this year as well as a 9.3 per cent unemployment rate by the end of 2020. Fed chair Jerome Powell said there may be “millions of people who don’t get to go back to their old job… there may not be a job in that industry for them for some time”.
Central bankers also confirmed they would not raise the near-zero interest rates until at least 2022. The Fed said: “The ongoing public health crisis will weigh heavily on economic activity, employment and inflation in the near term and poses considerable risks to the economic outlook over the medium term”.