A total of 6.6m Americans filed for first time unemployment claims in a surge for the third consecutive week after the coronavirus pandemic forced the closure of non-essential businesses and sent shockwaves through the US labour market.
Initial jobless claims remained elevated in the week ended April 4, but were lower than the 6.87m recorded the previous week, the labour department said on Thursday. Economists had forecast claims would slip to 5.5m.
The latest figures take the cumulative total since the March lockdowns began to almost 17m.
According to advance state-level estimates that have not been seasonally adjusted, California reported the highest number of jobless benefits filed at 925,450, while Georgia reported 388,175. Michigan recorded 384,844, while New York, which has been the US epicentre for Covid-19, reported 345,246 claims.
Treasuries sold off slightly following the release. The yield on the 10-year Treasury note gained roughly 0.02 percentage points to rise to 0.74 per cent. Meanwhile, the more policy-sensitive two-year note steadied at 0.24 per cent. Meanwhile, US futures point to a more than 1 per cent slide in the S&P 500.
The jobless claims figures have gained more prominence as they provide a more up-to-date snapshot of the American job market than the non-farm payroll report, which showed the US economy shed 701,000 jobs in March and the unemployment rate jumped to a 2.5 year high of 4.4 per cent.
The outbreak has ripped through the global economy, with the US expected to post sharp GDP declines in the first and second quarters. The minutes of the Federal Reserve’s two emergency meetings in March showed officials “viewed the near term US economic outlook as having deteriorated sharply in recent weeks and as having become profoundly uncertain”.
The number of coronavirus cases in the US has surpassed 435,000, while the death toll has climbed to more than 14,700, though hopes are rising that the outbreak could be nearing its peak domestically. Globally, confirmed cases have exceeded 1.5m and while the death toll has topped 88,000.