US weekly jobless claims climbing higher, with millions still unemployed

An additional 1.54 million Americans have filed for unemployment benefits in the week ending June 6, according to a report published by the US Labor Department on Thursday.

The figure is down slightly on the 1.88 million claims filed in the previous week. Over the past 12 weeks, more than 42 million Americans have applied for unemployment insurance, but some are beginning to return to work.

The US Labor Department’s report shows continuing claims slipped to 20 million in the week ending May 30 from 21.487 million in the prior week. The report follows last Friday’s news of a surprise 2.5 million increase in nonfarm payrolls in May. 

“Altogether, incoming data on jobless claims supports our view that the labor market reached a trough around the middle of May and that re-hiring activity has started to accelerate. That said, the persistent elevated readings of initial jobless claims highlight significant ongoing strain, and we expect the unemployment rate to remain in double digits into 2021,” wrote Nomura economist Lewis Alexander, reports Yahoo Finance.

The US Federal Reserve indicated on Wednesday that it would provide years of extraordinary support for the economy, with its chairman, Jerome Powell, noting an “extended period” during which it would be “difficult for many people to find work.”

Policymakers project a 9.3 percent unemployment rate at the year end. That rate jumped from 3.5 percent in February to hit 13.3 percent in May. 

“The steady retreat in claims is a positive development, but the labor market has suffered a traumatic blow, and a full recovery will be measured in years, not weeks or months,” lead US economist at Oxford Economics in New York Nancy Vanden Houten told Reuters, adding: “The figures don’t capture the full extent of the blow dealt to workers during this unique crisis.”

According to Alex Lin, a US economist at Bank of America Merrill Lynch Global Research in New York, “The labor market will continue to be under duress as businesses adapt to an economy running well below capacity, resulting in elevated layoffs.”

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