Jobless data show economic pain as Trump eyes U.S. reopening
WASHINGTON, USA – Brutal weekly unemployment numbers underscored the coronavirus pandemic's continued ability to destroy jobs in the United States, bringing the total to 36.5 million in two months as President Donald Trump and his allies pushed to reopen the world's largest economy.
About 2.98 million people filed fresh claims for unemployment benefits in the week ended May 9, the Labor Department said – a decrease from weeks prior but well above what analysts expected and still higher than any week prior to the pandemic.
The grim figures brought total job losses since the business shutdown began in mid-March to a level rivaled only by the Great Depression 90 years ago. Trump seized on the dismal numbers to call for easing lockdowns so people can get back to work.
"Good numbers coming out of states that are opening. America is getting its life back!" Trump tweeted after the data's release, later saying that he was "very disappointed" in the way China handled the virus, which first emerged in the city of Wuhan.
Public health experts have warned of the perils of a hasty reopening, with top medical advisor Anthony Fauci telling Congress this week that ending the lockdowns too quickly could bring "really serious" consequences, which "could even set you back on the road to trying to get economic recovery."
The Labor Department data showed the rate of increase of new jobless claims slowing overall, decreasing by around 200,000 compared to previous weeks.
But contrary to Trump's tweet, joblessness continues to grow in Florida and Georgia, states whose governors have been among the quickest to push reopening, with 221,905 and 241,387 new benefit claims filed in the most recent week, respectively.
Many newly jobless have found themselves in a precarious financial position, with more than a third reporting trouble paying their bills and nearly half unable to afford a $400 emergency, the Federal Reserve said in a survey released on Thursday, May 14.
For those earning less than $40,000, 39% reported a job loss, but the good news was that nearly all of the workers furloughed in March expected to return to their jobs, although more than three-fourths did not know when, according to the survey conducted in early April.
Wall Street stocks tumbled on the bad news as investors seemed to realize the economy wouldn't bounce back as quickly as they hoped, but by the afternoon the Dow was trading up 0.5%.
After governments ordered businesses closed to stop the spread of the virus, which has killed more than 84,000 people in the United States, the overall unemployment rate is nearing Depression-era levels as well, jumping to 14.7% in April with 20.5 million job losses in that month alone.
The total number of people actually receiving jobless benefits was at 22.8 million as of May 2, according to the Labor Department report – below the number of claims filed since the pandemic hit and indicating that states are struggling to process new claims, or that some claims are being rejected.
White House economic advisor Kevin Hassett said the latest data indicated the recent flood of claims was ebbing.
"The fact that we came in under 3 million suggests that the turning on the economy is beginning and it's beginning to show up with the data, so what we expect now is the claims will continue to decline as the economy turns back," he told reporters.
Call to spend
Federal Reserve Chair Jerome Powell on Wednesday, May 13, encouraged more emergency spending to help the world's largest economy weather the unprecedented shock, warning it could do "lasting damage."
"Additional fiscal support could be costly, but worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery," Powell said in a speech to the Peterson Institute for International Economics delivered remotely due to the virus.
Democrats controlling the House of Representatives on Tuesday, May 12, unveiled a $3-trillion measure that includes more payments to households and funding for health workers and emergency responders.
The measure could be voted on as early as this week, but its fate in the Senate is unclear as the chamber's Republican leadership has said a new round of emergency funding is not yet needed. (READ: Wave of coronavirus bankruptcies poses next threat to U.S. economy) – Rappler.com