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Initial claims for state unemployment benefits continued to trend lower with 1.54 million workers applying in the week ended June 6. That’s down from 1.9 million initial claims in the prior week. (Economists surveyed by Bloomberg had projected 1.55 million initial claims for the week.)

But while the trend is pointing in the right direction, the pace of the decline is agonizingly slow.

On Wednesday Fed chair Jerome Power said that the economic pain could last for years with “a significant chunk” — millions of workers — “who don’t get to go back to their old job, and there may not be a job in that industry for them for some time.”

Reopening efforts will quickly reinstate a third of the workers who lost their jobs, Beth Ann Bovino, chief U.S. economist at S&P Global, told the New York Times. But a return to the labor market conditions that preceded the pandemic is unlikely before 2023. “We’re expecting a long haul,” she said. “When people start talking about a V-shaped recovery, it’s like claiming success with the patient still on the table.”
Part of the reason for pessimism is that companies are still announcing big layoffs. On Monday, BP said it would lay off 10,000 workers worldwide.  The entertainment promotion giant AEG said it would carry out layoffs, furloughs and salary reductions on July 1. And states and cities have just begun job cuts to fill yawning budget deficits.

According to a survey by employment agency Manpower, in the third quarter, more employers than in the first half of the year expect to shrink payrolls, while fewer companies plan to increase hiring.

Continuing claims for unemployment–the total number of Americans claiming ongoing unemployment benefits in state programs–decreased by less than estimated to 20.9 million in the week ended May 30. The less-volatile four-week average of continuing claims declined for a second week to 22 million