Another 2.4m Americans applied for unemployment benefits last week, bringing the total number of first time applications to 38.6m since the coronavirus pandemic hit the world’s largest economy nine weeks ago.
It marked the seventh consecutive weekly decline in applications, in line with expectations of 2.4m for the week ending May 16, according to a survey of economists by Refinitiv.
The number of people actually receiving benefits rose to 25.07m for the week ending May 9, and those receiving unemployment insurance comprised 17.2 per cent of all workers that week.
The report suggests that lay-offs may have peaked as economies begin to gradually reopen and some furloughed employees resume work while others have found new jobs. However, concerns remain that job cuts which were expected to be temporary will become permanent.
Federal Reserve chair Jay Powell has warned that a full US economic recovery may take until the end of next year and could depend on the development of a Covid-19 vaccine.
Indeed, the minutes of the Federal Reserve’s April monetary policy meeting showed officials think the pandemic, which has already killed more than 87,000 people in America, will “continue to weigh heavily on economic activity, employment, and inflation in the near term and would pose considerable risks to the economic outlook over the medium term”.
US Congress has already approved nearly $3tn of economic relief measures to support struggling businesses and American households, but there is growing consensus that more fiscal stimulus will be needed. Last week, the Democrat-controlled House of Representatives passed Nancy Pelosi’s plan for $3tn in new stimulus spending.
