Total US layoffs caused by the coronavirus pandemic reached 44.2 million even as businesses try to reopen, and analysts warn of continuing damage to the world’s largest economy as COVID-19 shows few signs of abating.
Wall Street stocks plunged Thursday, reversing recent momentum as traders became spooked by resurgent cases of the virus in parts of the country and new Labor Department data showed another 1.54 million workers filed for unemployment benefits last week.
The massive layoffs have become routine since shutdowns to stop the coronavirus from spreading began in mid-March, reaching their peak later that month and declining since.
Some workers are back on the job as states reopen, but the total for the week ended June 6 is still well above any figure seen during the global financial crisis in 2008, even though it fell 355,000 from the prior week.
Rubeela Farooqi of High-Frequency Economics said the data shows the US economy is clearly not back to normal.
“States and businesses have reopened, but activity remains restricted and subdued, which will likely result in ongoing layoffs over coming weeks,” she said in an analysis.
COVID-19 remains a stubborn threat in the United States, which continues to record around 20,000 new cases every day with few signs of reduction. States like Texas and North Carolina are seeing more patients hospitalized with the virus than a month ago.
Federal Reserve officials on Wednesday released forecasts projecting the US economy would contract by 6.5 percent this year, and Fed Chair Jerome Powell warned that some workers may not find jobs for a long time.
The Labour Department data showed about 20.9 million people were receiving unemployment payments in the week ended May 30, down from 21.3 million the week before – indicating that people were either returning to work or had their initial claims denied.
All told, the report was in line with May’s unemployment rate, which declined to 13.3 percent from 14.7 percent in April as the US economy added 2.5 million jobs.