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Third week of big US jobless claims sees 6.61m filings
AMERICANS applied for unemployment benefits in massive numbers for a third straight week, bringing the total to about 16.8 million during the coronavirus pandemic's economic shutdown.
A total of 6.61 million people filed jobless claims in the week ended April 4, according to Labor Department figures released on Thursday, as more states ordered residents to stay home and overwhelmed unemployment offices continue to work through applications. The figure compared with a median forecast of 5.5 million, and the previous week's upwardly revised 6.87 million.
As wide swathes of the economy shut down, workers have been laid off across industries with unprecedented speed.
The latest jobless claims figures came as the US Federal Reserve on Thursday rolled out a broad, US$2.3 trillion effort to bolster local governments and small and mid-sized businesses in its latest move to keep the US economy intact. The central bank said it would work through banks to offer four-year loans to companies of up to 10,000 employees and directly buy the bonds of states and more populous counties and cities to help them respond to the health crisis.
"Our country's highest priority must be to address this public health crisis, providing care for the ill and limiting the further spread of the virus," said Fed chairman Jerome Powell. "The Fed's role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible."
The latest measures helped US stocks to open higher despite the dismal jobless claims figures. The Dow Jones Industrial Average rose 257.09 points at the open to 23,690.66. The S&P 500 was up by 27.01 points at 2,776.99 and the Nasdaq Composite gained 78.11 points to 8,169.01.
Filings for jobless claims will likely stay elevated in the coming weeks, after more states issued stay-at-home orders and Americans get through to file claims on jammed websites and phone lines. The three-week jobless claims tally implies an unemployment rate of around 13 or 14 per cent, surpassing the 10 per cent peak reached in the wake of the last recession. The rate was 4.4 per cent in March data that covered the early part of the month, up from a half-century low of 3.5 per cent in February.
"The labour market has entered a traumatic period," said Gregory Daco, chief US economist at Oxford Economics in New York. "We foresee the unemployment rate spiking to 14 per cent in April."
"These dismal numbers suggest another record-breaking April jobs report," said Beth Ann Bovino, chief US economist at S&P Global Ratings in New York. "America is now in recession and as it appears to deepen, the question is how long it will it take before the US recovers." BLOOMBERG, AFP, REUTERS