Another 1.9 million people filed jobless claims last week, the lowest level since the COVID-19 pandemic began closing U.S. businesses in mid-March.
Last week’s job losses bring the total number of Americans seeking unemployment benefits in the last three months to 42.9 million. It was the ninth consecutive week of declines after claims reached an all-time high of almost 7 million at the end of March, according to Labor Department data.
Continuing claims that measure the number of people receiving unemployment benefits rose to 21.49 million following a decline in the previous week after states eased lockdown restrictions and some workers were rehired. Most economists were expecting continuing claims to decline for a second week.
This week’s jobless claims data comes ahead of Friday’s release of the unemployment rate for May. Economists expect that figure will rise to 19.8% from March’s record-shattering 14.7%, based on a survey by Trading Economics. That would mean almost one in five Americans was out of work in the middle of last month.
As states reopen their economies, data points to “some bottoming in the pace of job losses” in May, said Diane Swonk, chief economist at Grant Thornton. However, the riots and looting that have disrupted peaceful protests following the George Floyd killing in Minneapolis could further delay a return to normal economic activity, she said.
“There is little doubt that small business and retail failures will be accelerated by the turmoil,” Swonk said. “Large stores with insurance will make repairs and reopen, while the smaller businesses holding on by a shoestring will close for good.”
The police officer who pressed his knee into Floyd’s neck until he died on May 25 was charged on Wednesday with a new, more serious count of second-degree murder, and the three other officers at the scene who did nothing to stop the killing were charged with aiding and abetting the murder.
If the nationwide protests lead to a surge in COVID-19 cases, it would delay a return to normal spending patterns and worsen the economic downturn, she said.
“Even peaceful protests could trigger a surge in COVID-19 cases, which would extend social distancing even if part of the country does not engage in another round of lockdowns,” Swonk said.
“The rioting could add to the fear many have about returning to public places,” she said. “It is really hard to escape the devastation of this crisis.”