U.S. Weekly Jobless Claims Decrease But Remain At Elevated Levels
A report released by the Labor Department on Thursday showed first-time claims for U.S. unemployment benefits decreased in the week ended April 11th but remain at a significantly elevated level.
The Labor Department said initial jobless claims dropped to 5.245 million, a decrease of 1.370 million from the previous week’s revised level of 6.615 million.
Economists had expected jobless claims to drop to 5.105 million from the 6.606 million originally reported for the previous month.
With the new claims filed last week, more than 22 million people have filed for unemployment since the start of the coronavirus-induced shutdown.
The report said the less volatile four-week moving average jumped to 5,508,500, an increase of 1,240,750 from the previous week’s revised average of 4,267,750.
Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also spiked by 4.530 million to a record high 11.976 million in the week ended April 4th.
The four-week moving average of continuing claims also surged up to 6,066,250, an increase of 2,568,500 from the previous week’s revised average of 3,497,750.
Paul Ashworth, Chief U.S. Economist at Capital Economics, said the latest data suggests the unemployment rate is on track to hit somewhere between 15 and 20 percent in April.
“Furthermore, adding in the likely increase from the 5.5 million claims filed last week, it’s now possible that the unemployment rate could even exceed 20% in May,” Ashworth said.
He added, “Nevertheless, we do still expect the unemployment rate to come down much more quickly than during a normal economic recovery, as temporary layoffs return to work once the lockdowns are lifted, so we still wouldn’t characterize this as a depression-type event.”
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