The numbers: New claims for traditional unemployment benefits fell slightly last week to 1.48 million, but remain stubbornly high three months after the start of the coronavirus pandemic, signaling that an incipient economic recovery is likely to be uneven.
Initial jobless claims, a rough measure of layoffs, declined in the seven days ended June 20 from 1.54 million in the previous week, the Labor Department said Thursday. The figures are seasonally adjusted.
While it marked the twelfth consecutive decline, new claims remain extremely high and cast doubt on whether a small rebound in the economy after a prolonged coronavirus-linked shutdown is about to hit a wall.
Economists surveyed by MarketWatch had forecast 1.38 million new seasonally adjusted claims. These figures reflect the applications normally submitted through state unemployment offices.
If you include people who applied for benefits through a temporary federal program, the new claims totaled 2.19 million unadjusted last week. That was down slightly from the revised 2.2 million.
Read:The United States entered a recession in February after the end of the longest expansion in history
Meanwhile, the number of people who are actually receiving traditional unemployment benefits dropped to 19.5 million in the week ending June 13 from 20.3 million. These so-called ongoing claims, reported with a delay of a week, have fallen painfully slow after peaking in mid-May at nearly 22.8 million.
What happened: New jobless claims have gradually decreased across the country, but economists widely expected them to decrease more rapidly after a national blockade of business activity ended and people began returning to work.
The high level of new claims could reflect a worrying wave of new layoffs in the worst case. Some companies also complain that generous unemployment benefits have deterred employees from returning to work.
It’s also possible that the record avalanche of applications has caused widespread mistakes by overworked state employment offices trying to handle falling in love.
Over 50 million claims for benefits have been filed in the past three months. Before the crisis, states handled about 222,000 a week.
See: Marketwatch Coronavirus Economic Recovery Tracker
Along with regularly filed claims for benefits across states, 728,120 additional new claims were filed last week under a temporary federal aid program established after the pandemic began. Forty-six states reported unadjusted figures for federal claims under the Pandemic Unemployment Assistance program.
If all eight state and federal assistance programs are included, continuing claims totaled 30.5 million unadjusted in the seven days ended June 6, the most recent data available. That marks a small increase of 29.3 million in the previous week.
MarketWatch is reporting selected unemployment claim data using actual or unadjusted figures to give a clearer picture of unemployment. Seasonally adjusted estimates that Wall Street normally expects have inflated jobless claims during the pandemic and become less accurate.
Big picture: If the government is accurately capturing the number of people applying for unemployment benefits, the slow decline in new applications is problematic enough. Another round of coronavirus outbreaks in highly populated states like California, Florida, and Texas could worsen if companies are forced to scale back down again.
While the speed of the initial economic rebound in May surprised economists, most still expect a bumpy recovery with more peaks and troughs in the coming months. Businesses and governments operate in unfamiliar territory and it can take a while to figure out what works.
What are they saying? “The high levels of initial and continuing claims are indicative of continuing tensions in the labor market,” said Rubeela Farooqi, chief US economist at High Frequency Economics.
“The concern is what the month of July and beyond could show, given the still high initial claims and the increase in the number of Covid-19 cases in many states,” wrote CIBC economists Andrew Grantham and Katherine Judge. Capital Markets.
Read: Checking out that funky drop in unemployment to 13.3%: no one really believes it
Market reaction:The Dow Jones Industrial Average DJIA,
and S&P 500 SPX,
They were slated to open lower on Thursday.