Another 3.8 million Americans filed jobless claims last week as the U.S. economy remained largely shuttered amid the coronavirus pandemic that has so far forced some 30 million Americans — that’s one out of ever five workers — to file for unemployment benefits.
The U.S. Labor Department reported that 3,839,000 Americans filed for unemployment benefits in the week ended April 25, above the 3.5 million claims expected by analysts polled by FactSet. The six-week total now stands at 30.3 million, the highest on record.
Continuing claims reached another grim milestone, hitting 17.992 million.
With roughly one-fifth of the U.S. working population now on unemployment benefits, analysts are all but sure that April’s nonfarm payrolls report will show a record-breaking double-digit gain in unemployment.
Federal Reserve Chairman Jerome Powell warned on Wednesday that Americans are going to see “economic data for the second quarter that is worse than any data we have seen for the economy," though he also pledged to continue to do what it takes to offset the unprecedented growth drop-off.
That is going to take a lot more time than initially expected by economists and investors, judging by the torrent of claims that continue to inundate state systems. The Labor Department said the previous week's claims were revised upward by 15,000 to 4.44 million, while the four-week moving average was 5.033 million.
The U.S. economy is officially pedaling backward, with first-quarter gross domestic product registering its steepest contraction since the financial crisis, according to U.S. government figures released on Wednesday.
The U.S. Commerce Department said that first-quarter gross domestic product, the broadest measure of goods and services produced across the economy, contracted at a seasonally adjusted annual rate of 4.8% in the first three months of the year.
The most recent claims data come ahead of next week’s nonfarm payrolls report for April, which is expected to show a decline of 2.25 million, with an unemployment rate of 15.1%, according to preliminary estimates from FactSet.