US Weekly Unemployment Claims at 3.84 Million Last Week... Exceed Market Expectations

If temporary layoffs lead to complete unemployment, the unemployment rate could reach 22%

[Image source=AP Yonhap News]

[Asia Economy Reporter Kwon Jaehee] Due to the impact of the novel coronavirus infection (COVID-19), the number of unemployment insurance claims in the United States reached 3.84 million last week. An increase in unemployment insurance claims means that the number of jobs has decreased accordingly.

On the 30th (local time), the U.S. Department of Labor announced that the number of new unemployment insurance claims last week (April 19-25) was 3.84 million. This exceeds the expert forecast of 3.5 million compiled by MarketWatch.

The number of new unemployment insurance claims in the U.S. began to rise sharply due to the COVID-19 crisis, reaching 3.3 million in the third week of March and soaring to 6.87 million in the fourth week of the same month. Afterwards, the numbers recorded were 6.61 million (March 29-April 4), 5.24 million (April 5-11), and 4.44 million (April 12-18). Although the number of claims has decreased for four consecutive weeks, the impact of unemployment is still ongoing.

By state, Florida recorded 432,500 claims, California 328,000 claims, and Georgia 264,800 claims, among others.

Bloomberg News warned that if temporary layoffs or unpaid leaves lead to complete unemployment, the unemployment rate could reach about 22%.

The scale of unemployment due to the COVID-19 crisis is expected to be more accurately revealed in the April non-farm payroll and unemployment rate data to be announced on May 8.

CNBC, citing financial information firm FactSet, reported that April non-farm payrolls are expected to decrease by 2.25 million jobs and the unemployment rate to reach 15.1%.

In March, U.S. non-farm payrolls decreased by 701,000 jobs as the COVID-19 crisis had some impact. This was the first time since September 2010 that new jobs showed a declining trend.

Companies have shut down factories and other operations due to decreased demand caused by the COVID-19 crisis or state government policies, and have implemented large-scale temporary layoffs or unpaid leaves to reduce costs.

The weekly new unemployment insurance claims, which have recorded millions for six consecutive weeks recently, are the highest since the U.S. Department of Labor began compiling them in 1967.

Until February, before the COVID-19 shock fully materialized, the average monthly number of new unemployment insurance claims in the U.S. over the past year was 216,000.

The previous record before the COVID-19 crisis was 695,000 claims in October 1982 during the second oil shock. After the financial crisis, it rose to 650,000 claims in 2009.

This content was produced with the assistance of AI translation services.