New U.S. jobless claims fell from 2.69 million to 2.44 million for the week of May 16, according to the latest Department of Labor report. The continued improvement was weaker than the consensus forecast of 2.4 million new claims.
“We continue to read of firms cutting their workforce and these are firms that were not immediately impacted by the mandated contraction from COVID-19,” Steve Blitz, chief U.S. economist at TS Lombard in New York, told Reuters.
The Labor Department revised the new jobless claim figure for the week of May 9 downward from 2.9 million to 2.69 million.
In a recent Census Bureau survey of American households, 39% of respondents said they expect another job loss by someone in their home over the next four weeks.
Still, the initial claims trend continues to level off. Continuing claims surged from 22.55 million to 25.07 million against a consensus forecast of 24.77 million.
“Most recently, continuing claims have plateaued and suggest that we could be seeing an early sign that employers are calling back employees as states begin to re-open,” Sam Bullard, a senior economist at Wells Fargo Securities, told Reuters.
“Focus should continue to center on continuing claims, which provide a better idea of the challenges unemployed workers face and also some insight into the hit to GDP growth.”
The numbers should give an idea of how many people were truly furloughed versus those facing longer-term unemployment.
“Continuing claims are going to be one of the best indicators going forward,” Shawn Snyder, head of investment strategy at Citi Personal Wealth Management, told MarketWatch. “It’s absolutely crucial these job losses end up as temporary and not permanent.”
Stanford University economist Nicholas Bloom expects about 42% of pandemic-related layoffs to be permanent.
“I hate to say it, but this is going to take longer and look grimmer than we thought,” Bloom told The New York Times of the nation’s recovery.