WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits dropped below 2 million last week for the first time since mid-March, but remains astonishingly high as companies adjust to an environment that has been significantly changed by COVID-19.
Other data on Thursday showed a jump in the trade deficit in April as the pandemic upended the global flow of goods and services, pushing exports to a 10-year low. The reports buttressed expectations the economy’s recovery from the coronavirus crisis would be a long slog even as activity appears to be stabilizing.
“The good news is the country may have turned the corner in the coronavirus pandemic, but the bad news is economic growth is going to just limp along if it has to carry millions and millions of jobless workers who cannot support themselves and are running out of benefits to pay the bills,” said Chris Rupkey, chief economist at MUFG in New York.
Initial claims for state unemployment benefits fell 249,000 to a seasonally adjusted 1.877 million for the week ended May 30, the Labor Department said. Economists polled by Reuters had forecast new claims would drop to 1.8 million in the latest week.
Though claims have declined since hitting a record 6.867 million in late March, they are three times larger than their peak during the 2007-2009 Great Recession. Still, the report suggested the worst is over for the labor market, combined with data on Wednesday that showed a smaller-than-expected drop in private payrolls in May.
Surveys have also shown consumer confidence, manufacturing and services industries stabilizing, albeit at low levels in May, indicating the downturn triggered by a near shutdown of the country in mid-March to control the spread of the COVID-19 respiratory illness was bottoming. Many businesses had reopened
