Federal Reserve Jerome Powell says it's unknown what unemployment numbers will get to as the economy begins to recover from coronavirus.
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Nearly 3.17 million Americans filed for unemployment last week, the Labor Department reported on Thursday, deepening the economic pain inflicted by the coronavirus pandemic on the U.S. workforce.
The new report, which covers the week ending May 2, pushes the seven-week total of losses since states adopted strict stay-at-home measures to more than 33 million, erasing the entirety of all jobs created during the past decade. Unemployment at this scale hasn’t been recorded since the Great Depression.
STATES DEPLETING UNEMPLOYMENT FUNDS AS CORONAVIRUS CAUSES MASSIVE SURGE IN JOBLESS CLAIMS
Although the number is still grim, it's the lowest amount of jobless claims since the week ended March 15.
Economists surveyed by Refinitiv had forecast 3 million.
The four-week moving average jumped to 17.1 million, an increase of 3.8 million from the previous week. Last week’s total was revised up by 7,000 to 3.84 million.
CORONAVIRUS LAYOFFS HURTING LOW-INCOME WORKERS THE MOST, STUDY FINDS
The latest evidence of the virus outbreak's toll on the labor market precedes the Labor Department's April jobs report, which is expected to reveal the economy shed 21.8 million jobs and unemployment skyrocketed to 16 percent last month, a record. The figures date back to 1948.
The private payroll processing firm ADP released its own report on Wednesday that indicated 20.2 million private-sector jobs were lost last month, with the most significant drops in the services sector. But that number could be low, as the data was collected only through April 12.
States, bogged down by antiquated systems, have struggled to process the flood of jobless applications.
Nearly half of U.S. states have reported double-digit percentage declines in their insurance programs since the end of February. States use the money to administer regular unemployment benefits, while the extra $600 weekly payments for laid-off workers stems from the federal stimulus package signed at the end of March.
HALF OF WORKING AMERICANS MIGHT NOT HAVE A PAYCHECK IN MAY
This week, California became the first state to tap federal money, borrowing $348 million, in order to keep paying out benefits. Illinois and Connecticut are expected to follow in California's footsteps soon.
Congress has passed four massive economic-relief packages totaling nearly $3 trillion, an unprecedented amount, to blunt the virus outbreak's toll on American workers and businesses.
Still, economists have warned that the labor market may be slow to return to pre-crisis levels.
“We’re going to see economic data for the second quarter that’s worse than any data we’ve seen for the economy," Federal Reserve Chairman Jerome Powell said during a news conference last week. He said that rolling back some social distancing measures could boost economic growth, but added: "It’s unlikely that it would bring us quickly all the way back to pre-crisis levels.”
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