U.S. Unemployment Claims Decline Steadily But Remain Extraordinarily Elevated

More than 4 million people filed first-time claims for U.S. unemployment benefits in the week ended April 18th, according to a report released by the Labor Department on Thursday, although that reflects a continued decline from the nearly 7 million people that filed first-time claims in the last week of March.

The Labor Department said initial jobless claims dropped to 4.427 million, a decrease of 810,000 from the previous week’s revised level of 5.237 million.

Economists had expected jobless claims to slump to 4.200 million from the 5.245 million originally reported for the previous week.

The latest data indicates more than 26 million people have filed for unemployment since social distancing guidelines and stay-at-home orders began taking effect last month.

Weekly jobless claims remain at an extraordinarily elevated level due to the coronavirus-induced economic shutdown but have slid steadily since reaching a record high of 6.867 million in the week ended March 28th.

Meanwhile, the Labor Department said the less volatile four-week moving average climbed to 5,786,500, an increase of 280,000 from the previous week’s revised average of 5,506,500.

The report said continuing claims, a reading on the number of people receiving ongoing employment assistance, also jumped by 4.064 million to a record high 15.976 million in the week ended April 11th.

The four-week moving average of continuing claims also spiked to 9,598,250, an increase of 3,548,000 from the previous week’s revised average of 6,050,250.

The Labor Department also said the seasonally adjusted insured unemployment rate surged to a record high 11.0 percent in the week ended April 11th from the previous week’s 8.2 percent.

Paul Ashworth, Chief U.S. Economist said the latest insured unemployment rate is particularly important because it matches the timing of when the surveys were conducted to calculate non-farm payroll employment and the official monthly unemployment rates for April.

“Based on the good historical relationship between the two, an 11% insured unemployment rate is consistent with a rise in the broader monthly U3 unemployment rate to a barely believable 23%,” Ashworth said.

“We’re not quite willing to bet on the unemployment rate reaching quite that level, but it will climb to between 15% and 20%,” he added.

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