Government Lending

Jobless claims top 40 million as pandemic layoffs hit 1 in 4 workers

Another 2.1 million Americans filed for unemployment benefits last week

Another 2.1 million Americans filed jobless claims last week, bringing the tally of jobs lost during the COVID-19 pandemic to 40 million, about one out of every four workers.

At the same time, there was a glimmer of hope: Continuing claims that measure the number of people receiving unemployment benefits declined for the first time since the start of the pandemic. The number of people receiving jobless benefits dropped by about 3.8 million to 21.1 million as some people were rehired, according to data released Thursday by the Labor Department.

“Continuing claims are particularly noisy these days due to processing lags and methodological issues, but given the magnitude of the decline, this could indicate a meaningful amount of rehiring,” Goldman Sachs economists said in a report.

The number of initial jobless claims was the lowest since the pandemic’s beginning in mid-March and marked the eighth consecutive week of declines since the all-time high of 6.9 million during the week ended March 28. During the worst week of the financial crisis, in March 2009, claims topped out at 665,000.

Three states posted large drops in continuing claims: Florida fell 76%, California fell 40% and Washington also fell 40%.

Some of the decline in ongoing claims can be attributed to states allowing businesses to reopen, often with the requirement they serve customers while maintaining social distancing, said a report from Wells Fargo economists.

And some likely is due to businesses receiving loans from the Paycheck Protection Program created by Congress in late March, the report said. The loans can be forgivable if used to either keep people on the payroll or rehire laid-off workers.

“The re-opening of the country, and likely also the PPP, appear to be driving employers and workers back together again,” the report said.

Still, 2.1 million jobless claims in a single week “remains tragically and
almost unbelievably high,” the Wells Fargo economists said.

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