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The numbers: About 1.5 million people applied for traditional jobless benefits in mid-June as the historic pace of layoffs slowed for the 10th straight week, but the high number of people still seeking or receiving financial aid suggests a fresh wave of layoffs may be crashing over the economy and stunting an embryonic recovery.
Initial jobless claims filed the traditional way through state unemployment offices fell slightly in the seven days ended June 13 from 1.57 million in the prior week, the Labor Department said Thursday. The figures are seasonally adjusted.
Economists polled by MarketWatch had forecast 1.35 million new claims.
If people who applied for unemployment benefits through a temporary federal program are included, new claims totaled an unadjusted 2.19 million in mid-June.
Read:U.S. entered recession in February after end of longest expansion in history
The number of people who are actually receiving traditional jobless benefits, meanwhile, barely fell to 20.54 million in the week ended May 30. They had peaked in the middle of May at nearly 23 million, but are declining at an agonizingly slow pace.
These so-called continuing claims, reported with a one-week lag, give a better idea of how much damage the coronavirus has caused to the labor market. New claims only reveal how many people may have lost their jobs at some point during the crisis, not how many are still out of work. At least several million people have since returned to their jobs as the economy has reopened.
What happened: New jobless claims have fallen steadily from a peak of almost 7 million in late March, but the decline has been much slower than economists had expected. They worry a second wave of layoffs is keeping the numbers elevated, posing a potential threat to an economic recovery that’s now in the early stages.
Before the pandemic erupted, new claims were running in the low 200,000s and sat near a 50-year low.
See:Marketwatch’s Coronavirus Economic Recovery Tracker.
If all eight state and federal assistance programs are included, continuing claims totaled an unadjusted 29.1 million in the seven days ended May 30, the most recent data available. That marks a small drop from 29.5 million in the prior week.
Read: Consumer prices drop again as pandemic cuts rate of inflation to near zero
Big picture: Almost 50 million new jobless claims have been filed since the pandemic began, but shocking as those numbers are, they don’t reveal much about how quickly the labor market is recovering.
The more important figure to watch is continuing claims, and while they’ve begun to subside, they are not declining at a pace that points to a rapid recovery in lost jobs. Unless they fall more quickly, and soon, the nascent recovery could be stunted.
Read: Revisiting that funky drop in unemployment to 13.3%: Nobody really believes it
Market reaction:The Dow Jones Industrial Average DJIA, -0.64% and S&P 500 SPX, -0.36% were set to open lower in Thursday trades.
