26.5m Americans seek unemployment benefits in 5 weeks

Washington

A STUNNING 26.5 million Americans have sought unemployment benefits over the last five weeks, confirming that all the jobs gained during the longest employment boom in US history have been wiped out as the novel coronavirus savages the economy.

The labour market slaughter added to collapsing oil prices, retail sales, manufacturing production, homebuilding and home sales in reinforcing economists' contention that the economy entered recession in March.

As the economic slump deepens, protests have risen against nationwide lockdowns to control the spread of Covid-19, the potentially lethal respiratory illness caused by the virus.

President Donald Trump, who is seeking a second term in the White House in November's general election, has been anxious to restart the paralysed economy.

Mr Trump on Wednesday applauded steps taken by a handful of Republican-led states to begin reopening their economies, despite warnings from health experts of a potential new surge in infections.

"Today's report shows the labour market is almost certainly pushing into new territory, jolting the unemployment rate up above the Great Recession's 10 per cent peak and wiping out more jobs than we've gained in the recovery," said Daniel Zhao, senior economist at Glassdoor, a website recruitment firm.

Initial claims for state unemployment benefits dropped 810,000 to a seasonally adjusted 4.427 million for the week ended April 18, the government said. Data for the prior week was revised to show 8,000 fewer applications received than previously reported, reducing the count for that period to 5.237 million. Economists polled by Reuters had forecast claims falling to 4.2 million in the latest week.

All told, 26.453 million people have filed claims for jobless benefits since March 21, representing 16.2 per cent of the labour force. The economy created 22 million jobs during the employment boom which started in September 2010 and abruptly ended in February this year.

The National Bureau of Economic Research, the private research institute regarded as the arbiter of US recessions, does not define a recession as two consecutive quarters of decline in real gross domestic product (GDP), as is the rule of thumb in many countries. Instead, it looks for a drop in activity, spread across the economy and lasting more than a few months.

Though weekly jobless filings remain very high, last week's data marked the third straight weekly decline, raising hopes that the worst may be over. Weekly claims appeared to have peaked at a record 6.867 million in the week ended March 28. REUTERS