First time claims for unemployment benefits came in slightly heavier than expected this week, but continuing claims came down significantly, helping buoy the case for a solid rebound from COVID.
For the week ending May 23, reports the Department of Labor, initial claims for unemployment were 2,123,000, a decline of 323,000 from the previous week.
The consensus estimate amongst economists was slightly lower at 2.1 million jobless claims for the week.
However, continuing claims for unemployment came down 3.86 million to 21,052,000. It’s the largest one week decline in jobless claims going back to 1967.
“This marked the first weekly decline in the data since the end of February. Continuing claims are still up substantially relative to the pre-virus norms but it will be important to see if this recent weekly decline marks a turning point in the data,” said investment house J.P.Morgan in a note to investors.
Under normal circumstances, one might expect that jobless claims would continue to go down steadily. But the rapid nature of the developing COVID crisis has been anything but normal.
Previous to the COVID crisis jobless claims had never carried more than 6.6 million people, 18 million fewer people than last week’s peak.
“There’s hope that monetary and fiscal support will carry us through and the virus will be checked,” wrote Raymond James economist Scott Brown in last week’s commentary. “However, economic improvement may take time and fall short of a full recovery.”
On the other hand, getting an unprecedented 3.86 million people back to work in one week should create a bit of momentum for the economy. That’s an awful lot of gas, dry cleaning, lunches and other economic activity that was absent last week.
“The economic outlook depends on the virus and efforts to contain it,” noted Brown.
An analysis by Epoch Times says thus far efforts in state like Texas and Florida that have reopened have been successful.
“Texas and Florida, the largest states that started to open up from lockdowns several weeks ago, haven’t seen a rebound of CCP virus infections, government data indicates.”
Meanwhile the mainstream media is completely missing the story:
From the New York Times: Breaking News: More than 40 million people — the equivalent of 1 in 4 U.S. workers — have now filed for unemployment benefits since the pandemic took hold
From ABCNews: BREAKING: Another 2.1 million more Americans filed for unemployment insurance last week, the Labor Department said. This pushes the total number of U.S. workers who have filed jobless to 40 million over the last 10 weeks amid the COVID-19 crisis.
All of that is true enough, but not exactly breaking news as the jobless claims came in pretty much as expected. 40 million Americans are not unemployed.
The better news is that 19 million have come off unemployment and 3.89 million people went back to work last week.
"There are some hopeful signs, some glimmers of hope and growth," top Trump economic advisor Larry Kudlow, told NewsmaxTV.
"We agree with the Congressional Budget Office, in the second half of this year, we could see growth of 20% at an annual rate, which would be the fastest growth in American history. That's what we're looking toward right now as we reopen."
John Ransom, founder of SanctionChina.com, is politics and economics writer/editor with offices in Washington DC, Singapore. You can find him on Facebook @ here and here.
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