Market participants got another pulse check on the U.S. labor market Thursday, as the world continues to grapple with the COVID-19 pandemic and ahead of the highly-anticipated April jobs report.
Another 3.169 million Americans filed for unemployment benefits in the week ending May 2, exceeding economists expectations for 3 million initial jobless claims. The prior week’s figure was revised higher to 3.846 million from the previously reported 3.839 million. So far over the past seven weeks, more than 33 million Americans have filed unemployment insurance claims.
Continuing claims, which lags initial jobless claims data by one week, totaled a record 22.65 million in the week ending April 25. The prior week’s 17.99 million continuing claims was revised higher to 18.01 million.
The weekly number of jobless claims has been steadily declining even as the cumulative number remains high.
“Jobless claims in the U.S. slowed again last week, but not as much as hoped. As the economy re-opens more broadly this process should accelerate, but the economic pain resulting from mass unemployment will restrain the recovery process,” ING economist James Knightley said in a note Thursday.
“This report tells us nothing about hiring though, which is likely to remain weak for some time to come given the economically depressing effects of social distancing, consumer caution relating to Covid-19 fears, travel restrictions and the legacy of tens of millions of people being out of work,” Knightley added.
Certain states got hit harder than others last week, as backlogs continue to get processed. California saw the highest number of initial jobless claims at an estimated 318,000 on an unadjusted basis, down from 325,000 in the prior week. Texas reported 247,000, down from 254,000 in the previous week. Georgia had an estimated 227,000 and New York reported 195,000. Florida, which had the highest number of claims in the prior week, reported 173,000 in the week ending May 2, down considerably from 433,000.
Thursday’s weekly claims report comes ahead of the Bureau of Labor Statistic’s April jobs report and on the heels of the ADP employment report. Wednesday morning, the U.S. private sector lost 20.23 million jobs in April and was the worst loss in the report’s history, according to ADP.
“Job losses of this scale are unprecedented. The total number of job losses for the month of April alone was more than double the total jobs lost during the Great Recession,” ADP Research Institute Co-Head Ahu Yildirmaz said in a statement.
“Additionally, it is important to note that the report is based on the total number of payroll records for employees who were active on a company’s payroll through the 12th of the month. This is the same time period the Bureau of Labor and Statistics uses for their survey,” Yildirmaz added.
Though the ADP report is not always a reliable indicator of what the BLS report will illustrate, it does provide a bit of insight into the health of employment in the U.S.
“The report is a bit light on details of any potential methodological problems this month. The ADP counts anyone on the active payroll rather than just people who were paid during the month, which is the official non-farm payroll definition. Within many people put on temporary layoff, that could have created a discrepancy, with those people still on the active payroll, but not counted in the official non-farm payroll figures and also qualifying as unemployed in the other official household survey,” Capital Economics said in a note Wednesday.
Economists polled by Bloomberg expect 21.3 million jobs losses in April when the BLS releases its report Friday morning, down significantly from 701,000 job losses in March. The unemployment rate is estimated to have surged to 16% from 4.4% in the prior month.
“April jobs report should go down in infamy,” Bank of America economists said in a note Wednesday. “The April employment report will reveal unprecedented job losses as the economy has been shutdown to control the spread of COVID-19.” The firm projects 22 million job losses during the month amid the global pandemic.
One important thing to note with April’s jobs report is that there might be some discrepancies in the two surveys. A furloughed person, who is not working but has not been laid off, will be classified as unemployed or temporarily laid off in the household survey. However, if they were paid at any point during the establishment survey period, they will be classified as employed.
As of Thursday morning, there were 3.7 million confirmed coronavirus cases and 264,000 deaths globally, according to Johns Hopkins University data. In the U.S., there were 1.2 million cases and 73,000 deaths.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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