U.S. weekly initial jobless claims fall, but remains high

U.S. initial jobless claims dropped to a still elevated 4.4 million for the week ended 18th April, consistent with market expectations of 4.3 million. This was a fall of 810k from the previous week. Continuing claims came in at 15.98 million for the week ended 11th, as compared with market expectations of +16.48 million.

Region wise, California saw the largest number of claims at 533,568. Florida followed at +505,137, while Texas, Georgia and New York recorded +280,406, +243,667 and +204,716, respectively.

Extraordinarily high number of Americans filed for unemployment benefits last week, taking the total number of jobless claims to over 26 million since the mid-March. The only positive part was that the number of people filing claims has been coming down since the start of April. This is partially because of employers retaining their employees and workers finding other jobs, noted TD Economics in a research report.

The Paycheck Protection Program’s (PPP) popularity shows that employers are holding onto employees. The USD 350 billion program was entirely exhausted late last week, prompting calls by small businesses to rapidly replenish the fund. Congress responded by agreeing to add an additional USD 310 billion to the program.

“Despite financial assistance programs like PPP, extensive damage has been done to the labor market. The unemployment rate is on track to reach around 20 percent this month. However, with self-distancing measures helping bring down the infection rate, some states are planning to open the economy bit-by-bit in May. This should help resuscitate the badly battered labor market”, added TD Economics.