Another 3.5 million initial unemployment insurance (UI) claims were filed the week ending April 25, bringing the total number of claims filed to 27.9 million in the past six weeks (ignoring seasonal adjustments to the data). The report showed a third straight week of declining claims filed and the fewest number of claims since late March—an encouraging trend—but the volume of claims was nonetheless staggering, up more than 17 times the number filed (205,000) this week of last year. The full Bureau of Labor Statistics report can be found here.
The 3.5 million workers who initially filed for unemployment last week represent about 2.3% of total U.S. employment as of February, bringing the cumulative decline in employment to at least 18.1% in two months. That’s nearly three times the cumulative percentage decline in U.S. employment experienced during the Great Recession. More than one of six workers employed in February has subsequently lose their job and filed for unemployment, while others have lost hours or have not qualified for UI.
The BLS jobs report for April will be released next Friday, May 8. Economist Heidi Shierholz of the Economic Policy Institute points out that the job loss from initial claims imply an unemployment rate of just over 20%, everything else being equal:
All else equal, job losses of this magnitude would translate into an unemployment rate of 20.5%. 2/
— Heidi Shierholz (@hshierholz) April 30, 2020
For more in-depth coverage of the UI report, here’s my recommended reading:
- EPI’s Working Economics blog (4/30/20): Nearly 28 million workers applied for unemployment insurance benefits in the last six weeks by Heidi Shierholz
In other news related to a rapidly deteriorating labor market…
The Bureau of Economic Analysis also released the Personal Income and Outlays report for March this morning, which showed a larger-than-expected 2% decline in disposable income (i.e., after-tax income) for the month. Real personal consumption expenditure fell 7.3% for the month, which was in line with the drop in consumption in yesterday’s advanced read on first quarter GDP. The real kicker: The personal saving rate—defined as personal saving as a percentage of disposable personal income—jumped to 13.1%, the highest level in nearly four decades. Much of the increase was likely driven by precautionary savings, as households decreased spending out of fear and uncertainty about loss of income or jobs. The BEA report can be found here. Via FRED: