US unemployment claims are close to 3 million
Another 2.981 million workers filed for unemployment claims last week, boosting the total during the coronavirus pandemic to nearly 36.5 million –the largest number of job losses in US history, the US Labor Department reported Thursday.
Economists surveyed by The Wall Street Journal expected 2.7 million workers to file initial jobless claims.
US stocks opened lower on the news.
However, the number of initial claims has declined for six consecutive weeks since peaking in the last week of March. This may suggest that the worst of the job cuts are over.
"The numbers are very high, but they're stepping down every week, and I see no reason why the decline in filings wouldn't continue," Keith Hall, chief economist for the Council of Economic Advisers under former President George W. Bush, told the Journal. "Employers are likely poised to bring people back, but right now we're in a holding pattern."
A provision in the federal stimulus bill allows workers who were generally ineligible for benefits prior to the pandemic, including the self-employed and independent contracts, to apply for unemployment benefits.
About 1.4 million such workers throughout the nation filed initial jobless claims between April 19 and May 2. But the claims are not included in the total number of those seeking benefits, the Labor Department said.
The economy was strong and the job market robust a recently as February. Then the coronavirus hit, and states ordered people to stay home to curb spread of the disease.
Some states, including Florida, Indiana, Texas and Utah, are easing restrictions and taking the first steps to re-starting the economy. But others, including California and Michigan remain generally locked down.
New York City remains closed and subway ridership has plunged about 95 percent. But selected areas in the less densely populated northern, southern and western portions of New York state are re-opening.
"With most states only beginning to ease their lockdowns within the last 10 days, we expect a much bigger swing in hiring versus firing over the next couple of weeks, which suggests the unemployment rate will begin to drop back," Paul Ashworth, chief US economist at Capital Economics, told CNBC.
In early trading Thursday, the Dow Jones Industrial Average fell 180.12 points, or 0.74 percent, to 23,067.76. The S&P 500 lost 0.84 percent. The Nasdaq Composite TK slipped 0.58 percent.
On Wednesday, the Dow lost 516.81 points, or 2.17 percent, and closed at 23,247.97. The S&P 500 fell 1.75 percent. The Nasdaq Composite dropped 1.55 percent.
West Texas Intermediate crude futures, the gauge for US prices, rose 2.89 percent to $26.01 a barrel. Brent crude, the worldwide benchmark, rose 2.81 percent to $30.01. The price of oil is a proxy for future economic activity.
Goldman Sachs analysts Zach Pandl believes another "big setback" in the US economy could lead the Federal Reserve to adopt negative interest rates.
But Pandl told CNBC the policy wouldn't be "very helpful."
Federal Reserve Chairman Jerome Powell said Wednesday that the nation's central bank isn't considering negative interest rates.
With negative rates, banks charge savers to keep cash on deposit. This occurs during a deep recession and is an effort to encourage lending and boost the economy. Japan adopted the policy last year.
Heightened health concerns during the coronavirus pandemic appear to benefit a company that helps people lose weight and keep it off.
Shares of WW International, formerly called Weight Watchers, gained nearly 5 percent Wednesday after Jefferies issued a "buy" rating for the stock and set a $32 price target, or an analyst's estimate of its full value.
The analyst said the coronavirus pandemic had started a "durable trend" that could sustain "superior growth" for the company.
The stock jumped as much as 10 percent in intraday trading Wednesday on the news, but the pop appeared to be short-lived. In early trading Thursday, the stock slid 1.95 percent.
