US job losses pass 40 million as coronavirus crisis deepens

Roughly 2.1 million people applied for US unemployment benefits last week, a sign that companies are still slashing jobs in the face of a deep recession even as more businesses reopen and rehire some laid-off employees.

About 41 million people have now applied for aid since the virus outbreak intensified in March, though not all of them are still unemployed. The US Labor Department’s report Thursday includes a count of all the people now receiving unemployment aid: 21 million. That is a rough measure of the number of unemployed Americans. The national jobless rate was 14.7% in April, the highest since the Great Depression, and many economists expect it will near 20% in May.

The jobs report is being watched to assess how quickly the economy rebounds after businesses shuttered in mid-March to control the spread of COVID-19 and almost ground the country to a halt. While non-essential businesses are starting to reopen, claims have stayed at astonishingly high levels.

“I am concerned that we are seeing a second round of private sector layoffs that, coupled with a rising number of public sectors cut backs is driving up the number of people unemployed,” said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania.

“If that is the case, given the pace of reopening, we could be in for an extended period of extraordinary high unemployment. And that means the recovery will be slower and will take a lot longer.”

The US Commerce Department is expected to confirm in another report on Thursday that gross domestic product contracted at a 4.8% annualized rate in the first quarter, the deepest decline in output since the 2007-09 Great Recession. The second wave of layoffs could grow bigger, with Boeing announcing on Wednesday it was eliminating more than 12,000 US jobs and also disclosing it planned “several thousand remaining layoffs” in the next few months. The Federal Reserve’s Beige Book on Wednesday, comprising anecdotal information on business activity from contacts nationwide on or before May 18, was equally grim. Its depiction of the labor market said “employment continued to decrease in all districts” and “continued to fall sharply in retail and in leisure and hospitality sectors.”