More than 6.6 million Americans filed jobless claims in the week ended on March 28, the Department of Labor said.
The number of people seeking unemployment benefits has hit a record high for the second week in a row as the economic toll tied to the coronavirus intensifies.
Last week’s number is nearly double the week earlier, which was also a new record.
The deepening economic crisis comes as the number of cases in the US soars to more than 216,000.
With the death toll going above 5,000, the White House recently said it would retain restrictions on activity to try to curb the outbreak.
Analysts at Bank of America warned that the US could see “the deepest recession on record” amid forecasts that the unemployment rate could hit more than 15%.
The outlook is a stark reversal for the world’s biggest economy where the unemployment rate had been hovering around 3.5%.
However, more than 80% of Americans are now under some form of lockdown, which has forced the closure of most businesses.
More than 3.3 million people filed claims two weeks ago, eclipsing the previous record of 695,000, set in 1982 and bringing the two-week total to about 10 million.
According to Labor Department data, US companies added 128,000 new jobs,
ahead of a forecast 85,000 rise, during October, when thousands of workers walked
out at General Motors.
Last month’s employment was more resilient than
expected despite the impact of strike action at the auto maker.
The unemployment rate edged up slightly to 3.6% from 3.5% in September,
which had been the lowest rate since 1969.
According to analysts, the data supported the Federal Reserve’s comments
earlier this week that the economy is in good shape.
President Donald Trump immediately praised “blowout” jobs data,
stating that adjusted employment figures showed growth of 303,000 roles.
However, this includes upgrades to figures from previous months and other
adjustments.
He tweeted: “Wow, a
blowout JOBS number just out, adjusted for revisions and the General Motors
strike, 303,000. This is far greater than expectations. USA ROCKS!”
The jobs data for August and September was revised upwards. In August, 51,000
more roles than originally thought were added to the US economy and 44,000 more
jobs were created in September.
The data from the Labor Department showed that the manufacturing sector shed
36,000 positions last month, the biggest fall for a decade.
However, within manufacturing, employment in the motor vehicles and parts
sector declined by 42,000 because of the strike at GM. Striking employees are
treated as unemployed in the US statistics.
The White House said that 60,000 jobs were affected by the GM strikes.
Public sector payrolls fell in October because 20,000 temporary workers who
had been preparing for the 2020 Census completed their work.
On October 30, the Federal Reserve cut the key interest rate, but signaled that there would not be further reductions in the near term.
The US unemployment rate fell to a 10-year low in March, despite the economy adding a smaller than expected number of jobs.
Employers added 98,000 jobs in March 2017 – far fewer than the 180,000 expected by economists and less than half the figure for January and February.
However, the unemployment rate fell from 4.7% in February to just 4.5% – the lowest since May 2007.
Anything under 5% is considered to indicate “full employment”.
Image source Wikimedia
The US economy needs to create 75,000 to 100,000 jobs a month to keep pace with growth in the working-age population.
It had added more than 200,000 jobs in both January and February 2017, but March brought lower temperatures and a major storm to the North East, which was likely to have hit hiring.
Aberdeen Asset Management investment strategist Luke Bartholomew said the decline in job creation was another sign of a “pretty tight” labor market.
The dollar rose against the euro and pound, while the Dow Jones and S&P 500 were flat in morning trading in New York.
The US Labor Department also revised the number of jobs created in February down from 235,000 to 219,000, while the figure for January was lowered from 238,000 to 216,000.
The percentage of people in work or looking for a job held steady at 63%.
According to the latest figures from the Bureau of Labor Statistics, the US economy added 142,000 jobs in August 2014, less than the lowest estimate.
The unemployment rate dipped to 6.1% from 6.2% in July 2014.
The world’s largest economy had been averaging a monthly jobs gain of 212,000 in the previous 12 months.
Part of the sluggish jobs growth was attributed to a loss of 17,000 food and beverage jobs as a result of a supermarket store strike.
Thousands of employees of the Market Basket chain of supermarkets in the northeastern US had gone on strike in July to protest the firing of their boss. The dispute was resolved late last week.
US markets did not react strongly to the news, with all three indexes dipping just slightly lower in early morning trading in New York.
The US economy added 142,000 jobs in August 2014, less than the lowest estimate
There were some bright spots in the August jobs report: wage growth, a crucial sign of the strength of the US economy, ticked up slightly.
Average hourly earnings are now growing at 2.1% year over year. US Federal Reserve chair Janet Yellen has previously indicated that wages are a crucial factor in the Fed’s analysis of the state of the health of the US jobs market.
Employment in the car industry also dipped less than expected, as fewer workers were laid off for factory retooling.
Jobs growth in the professional and business services also continued to lead the recovery, with an additional 47,000 jobs adding in August, bringing the yearly total to 639,000.
Most analysts believe that the sluggish August figure will give central bankers pause for thought as they consider when to end the Fed’s extraordinary support of the US economy.
The Fed is scheduled to meet on September 16-17.
Many have wondered whether or not so-called “hawks”, who favor increasing interest rates, would be able to persuade other members of the committee to move forward the bank’s plans to raise interest rates from their historically low levels of 0%.
The US unemployment rate fell in September to its lowest rate since January 2009, figures from the Department of Labor have shown, surprising analysts who had been expecting a small rise.
September’s rate came in at 7.8%, down from 8.1% in August.
The latest data also showed that the US economy added a further 114,000 jobs in September, slightly more than markets had expected.
The US jobs market is a key issue in the presidential election race.
When the unemployment rate was last this low, President Barack Obama was about to take office.
However, economist Sean Incremona of New York-based company 4Cast said the latest data showed that the US economy remained subdued.
“Generally, we are still seeing a mixed underlying picture that is neither too impressive nor terrible,” he said.
Fellow economist, Omer Esiner, of Rhode Island-based Commonwealth Foreign Exchange, was more upbeat.
“The headline of the day is clearly the drop in the unemployment rate, which was a big surprise,” he said.
“There is something in these numbers for everyone. The rise in the participation rate shows somewhat of a real improvement in the labour market.”
The latest official data showed that the construction sector added 5,000 jobs last month, while the number of people working in government jobs rose by 10,000.
However, the biggest gain was record in the healthcare sector, which added 44,000 jobs in September.
The Labor Department also used the release of the September data to revise up how many new jobs were created in both July and August. It said that 86,000 more jobs than first calculated were added across the two months.
Separate official figures released at the end of last month revised down by how much the US economy had grown between April and June.
Gross domestic product (GDP) in the second quarter grew at an annualized rate of 1.3%, down from the previous estimate of 1.7%.
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