Jobless claims decline but millions still out of work

Jobless claims decline but millions still out of work

Layoffs in the United States are abating, but millions who lost their jobs because of COVID-19 continue to draw unemployment benefits, suggesting the labor market could take years to heal from the pandemic even as businesses resume hiring workers.

Conway G.

Gittens breaks down the numbers.

The latest data on U.S. jobless claims shows both a continued drop in those seeking benefits, and an historically high number of people out of work.

New claims fell to 1.5 million… that's the 10th straight weekly decline, according to government data released Thursday.

But that figure is still more than twice as high as the number of Americans who sought benefits at the peak of the great recession And in another sobering gut check, those relying on jobless benefits beyond the first week, known as continuing claims, still hovers around an eye-popping 21 million.

Thursday's data served as a reminder of the long-road to recovery that lies ahead for the U.S. economy, despite a solid bounce-back in hiring last month.

Federal Reserve Chairman Jerome Powell admitted as much in a webcast with journalist on Wednesday.

"The May employment report, of course, was a welcome surprise, very pleased.

We hope we get many more like it.

But I think we have to be honest that it's a long road, depending on how you count it, well more than 20 million people displaced in the labor market.

It's going to take some time.

And we are going to be deploying our tools, all of our tools to their full extent in pursuit of those goals, however long it takes." The Fed's grim outlook was cited as one of the reasons the stock market is trading sharply lower on Thursday.

Investors were also un-nerved by new signs that a second-wave of the health crisis is emerging in states that were early to re-open.

And that is sparking fear the layoffs aren't over.

Spirit Aerosystems, the top supplier to aerospace giant Boeing, announced that it will be temporarily laying off workers beginning next week.