While the number of new claims fell for an 11th straight week from a record 6.867 million in late March, initial weekly claims remain roughly double their peak during the 2007–2009 Great Recession.
“People will say claims are coming down, but for an economy that is reopening, that is a huge number,” said Steven Blitz, chief U.S. economist at TS Lombard in New York.
“The economy is losing workers and employment beyond the initial impact tied to businesses that shut down. There are a lot of industries that are getting hurt and that’s starting to cascade down, that is what those numbers are showing,” he said.
The weekly jobless claims report, which is the most timely data on the economy’s health, shows a picture of continued labor market distress even though employers hired a record 2.5 million workers in May as businesses reopened after shuttering in mid-March to curb the spread of COVID-19.
Continued layoffs amid weak demand and fractured supply chains are likely keeping new applications for unemployment benefits elevated, feeding into the view that the economy faces a long and difficult recovery from the pandemic-fueled recession.
“Something like close to 25 million people have been displaced in the workforce, either partially or through unemployment, and so we have a long road ahead of us to get those people back to work,” Federal Reserve Chairman Jerome Powell told the Senate Banking Committee in June 16 testimony.
Powell told lawmakers that the Fed would use all available monetary policy tools to help the economy recover, but urged Congress to provide more fiscal support, which he called a “critical difference” in limiting long-lasting damage to the economy.
Powell renewed calls for fiscal measures in testimony June 17 via a video link to the House of Representatives Financial Services Committee.
“We at the Fed need to keep our foot on the gas until we are really sure we are through this, and that’s our intention, and I think you may find that there’s more for you to do as well,” Powell said.
“It would be a concern if Congress were to pull back on the support that it’s providing, too quickly,” he said.
The severity of the economic impact of the pandemic justifies extraordinary steps, even though some analysts may find them “alarming,” Robert Johnson, professor of finance at Creighton University’s Heider College of Business, told The Epoch Times in an emailed statement.
“Monetary measures alone will not ensure that the U.S. economy will weather the pandemic. Coordinated monetary and fiscal measures are called for,” he said. “Given that I believe the recovery will be years and not months—and W-shaped and not V-shaped, I feel that more fiscal stimulus measures are warranted.”
Labor Department figures showed that the largest increases in initial claims were in California (+27,202), Massachusetts (+17,512), and Oklahoma (+17,149). The biggest drops were in Florida (-95,546), Texas (-17,001), and Georgia (-13,909).
The number of continuing claims, which represent people who earlier filed initial claims and remain unemployed, was 20.544 million for the week ending June 6. This is down by 62,000 compared to the previous week, which was revised down to 20.606 million.
The seasonally-adjusted insured unemployment rate was 14.1 percent for the week ending June 6, unchanged from the previous week. The highest insured unemployment rate for the week ending May 30 was in hospitality industry-reliant Nevada (24.2 percent), followed by Puerto Rico (21.2 percent), and Hawaii (20.2 percent).
