Another 2.4 million people filed jobless claims last week, bringing the number of Americans seeking unemployment benefits in the nine weeks since the beginning of the COVID-19 pandemic to 38.6 million.
It was the lowest weekly level of claims since job losses began to spike in mid-March, and the seventh consecutive week of declines after reaching an all-time high of 6.87 million at the end of March, according to Labor Department data.
Even with the reduction, last week’s reading was more than triple the highest week of the financial crisis.
“When 2.4 million is good, you know things are bad,” Wells Fargo economists said in a statement after the release of the report on Thursday morning.
“At any other time in the past 50 years, news that 2.4 million Americans filed claims for unemployment insurance in a single week would be a horrifying development,” the economists said. “But in March and April we saw weekly figures that at times crested above 6 million, so today’s news that jobless claims fell to 2.4 million after 2.7 million last week is good news.”
The job losses are causing Americans to fall behind on their bills, including mortgages. Home-loan delinquencies almost doubled in April, Black Knight said in a Thursday report.
The U.S. delinquency rate rose to 6.45% from 3.39% in March, the largest monthly increase ever recorded, the mortgage data firm said. The April spike in a tally that includes loans in forbearance was almost triple the previous record gain in 2008, near the beginning of the financial crisis.
About 4.7 million mortgages are in forbearance, representing 8.8% of all home loans, Black Knight said in a Friday report. By the end of June, almost one in 10 mortgages – and possibly one in eight, depending on the condition of the economy – could be approved for payment suspensions, the mortgage data firm said.
It’s hard to make accurate comparisons to jobless claims in past economic crisis because the CARES Act passed by Congress at the end of March expanded the pool of people eligible to file claims for unemployment insurance, said Doug Duncan, chief economist of Fannie Mae.
Congress made so-called gig workers, such as freelancers and Uber drivers, eligible for unemployment insurance. However, many states were late in revamping their systems to make those claims possible.
“On one hand, unemployment insurance eligibility rules have been relaxed recently, increasing the number of people who are able to apply,” Duncan said. “On the other hand, many states reported a significant backlog of unemployment insurance applications due to a lack of processing capacity, indicating that this week’s release may understate the true extent of insured layoffs.”