Economists surveyed by Dow Jones predicted that the US would see 1.3 million new unemployment claims last week, but the real number turned out to be higher by 200,000 Americans, around 1.5 million.
Keep in mind that, before this current crisis, the single worst week for unemployment claims saw 695,000 new filings back in September of 1982, a staggering number but nothing compared to the record highs now hitting the US. Even experts are baffled as to why claims are so persistently high. According to Ian Shepherdson, the chief economist at Pantheon Macroeconomics, this could be because the aftermath of the initial economic shock caused by the pandemic is still making its way through some businesses, or perhaps businesses that believed they would survive the crash are now finally giving way. All in all, it is clear that recovery will be much slower than originally anticipated.
The total number of Americans who have filed unemployment claims since the start of the pandemic is already pushing beyond 44 million. Even still, there were enough new people losing jobs over past weeks to more than double old records.
Some experts predicted that jobs would begin to make a recovery throughout the reopenings. However, even though May’s unemployment rate was 13.3 percent, down from 14.7 percent in April as 2.5 million new jobs were added to the US economy, the bigger picture remains grim. The latest reports bring the grand total of US citizens who have filed claims for unemployment benefits since the start of the health crisis to almost 46 million.
Markets were down in reaction to the bleak news, with the Dow Jones Industrial Average dropping about 1 percent in early trading.
Unemployment benefits are set to expire at the end of July, at which point many unemployed Americans would lose the only source of cash flow that keeps their fridges stocked and rent or mortgage payments on time. The Fed is pushing to extend benefits for a longer period of time as the economic damage continues to wreak havoc, but eventually the cash printing and stimulus checks will have to end.
In the meantime, the country’s infrastructure is falling apart. Earlier this week, there were reports from Kentucky that Americans who had lost their jobs were being forced to spend up to 8 hours waiting in line before they were able to speak with an official about unemployment claims that had yet to be processed. Videos on Twitter show time lapses of crowds stretching down neighborhood streets. Even then, those that could even get a meeting were the lucky ones, and many were sent home and told they would receive a call when they could return.
The US economy was supposed to be in the midst of a grand recovery right now, as lifted lockdowns sparked a new surge in economic activity. But the bad news just keeps on coming.
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