First-time claims for U.S. unemployment benefits totaled 2.1 million last week, the lowest total since the COVID-19 coronavirus shutdown began. Economists surveyed by Dow Jones had been looking for 2.05 million. The total represented a decrease of 323,000 from the previous week’s 2.438 million.
Continuing claims, or those who have been collecting for at least two weeks, numbered 21.05 million, a sharp drop, falling 3.86 million from the previous week.
The insured unemployment rate, which is a basic calculation of those collecting benefits vs. the total labor force, came down sharply to 14.5% from 17.1% the previous week.
Since the pandemic was declared in mid-March, more than 40 million have filed claims as social distancing measures aimed at containing the coronavirus outbreak resulted in much of the $21.5 trillion U.S. economy being in lockdown since mid-March.
A separate report Thursday showed that first-quarter GDP contracted by 5%, while the Atlanta Fed’s GDPNow tracker is indicating a 41.9% plunge in Q2 that will be the worst in U.S. history. That would put the U.S. firmly in recession territory, though most economists are expecting a rebound in the second half of the year after restrictions are lifted.
The U.S. economy is beginning to recover from shutdowns tied to the coronavirus pandemic, Bank of America CEO Brian Moynihan told CNBC.
Moynihan cited consumer spending figures from the millions of households using his lender’s credit and debit cards: While transactions collapsed by about 30% in April, it was down by only 5% to 10% in May.
“You’re starting to see the economy come out of the hole,” Moynihan told CNBC’s Becky Quick on Squawk Box. ”You’re seeing us come out of the depths of where we were in April, and that’s good news.”
“The real difference is the amount of stimulus that has gone into the economy,” Moynihan said.
Checking accounts below $5,000 in average balances actually had 30% to 40% more money in them compared with 12 weeks ago, he said.
MacDailyNews Take: It’s certainly great to see U.S. unemployment claims dropping! Hopefully, the stimulus has primed the pump, making for a strong recovery that will ease the pain caused by the coronavirus shutdown for many millions.