Record 22m Americans seek unemployment aid

WASHINGTON: A record 22 million Americans have sought unemployment benefits over the past month, with millions more filing claims last week, almost wiping out all the job gains since the Great Recession.

This underscores the toll on the economy from extraordinary measures taken to control the novel coronavirus outbreak.

The deepening economic slump was also amplified by other data yesterday showing manufacturing activity in the mid-Atlantic region plunged to levels last seen in 1980 and homebuilding tumbling by the most in 36 years in March.

The reports followed dismal reports on Wednesday of a record drop in retail sales in March and the biggest decline in factory output since 1946. Economists are predicting the economy, which they believe is already in recession, contracted in the first quarter at its sharpest pace since the Second World War.

Initial claims for state unemployment benefits dropped 1.37m to a seasonally adjusted 5.245m for the week ended April 11, the government said. Data for the prior week was revised to show 9,000 more applications received than previously reported, taking the tally for that period to 6.615m.

A total of 22.034m people have filed claims for jobless benefits since March 21, representing about 13.5 per cent of the labour force. Employment bottomed at around 138m in December 2010 and peaked at 158.8m in February. At face value, the staggering claims numbers set the economy on course for job losses of more than 1m in April.

But a historic $2.3 trillion fiscal package signed by President Donald Trump last month made provisions for small businesses to access loans that could be partially forgiven if they were used for employee salaries.

In a separate report yesterday, the Commerce Department said housing starts plunged 22.3pc to a seasonally adjusted annual rate of 1.216m units last month. That was the largest monthly decline in starts since March 1984.

The Philadelphia Federal Reserve also reported that its measure of business conditions in the mid-Atlantic region dropped to a reading of -56.6 in April, the lowest reading since July 1980, from -12.7 in March.

Experts are estimating the economy contracted as much as 10.8pc in the first quarter, which would be the steepest drop in gross domestic product since 1947.

Economists say the economy entered recession in March.

Yesterday’s claims report also showed the number of people continuing to receive benefits after an initial week of aid surged 4.53m to a record 11.976m in the week ending April 4.

The so-called continuing claims data is reported with a one-week lag and is viewed as a better gauge of unemployment. Economists expect the unemployment rate in April will blow past the Great Recession’s peak of 10pc and the post-Second World War high of 10.8pc touched in December 1982.

Source: http://www.gdnonline.com/Details/800195

 

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