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U.S. Initial Jobless Claims Drop But Still Exceed 6.6 Million

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First-time claims for U.S. unemployment benefits decreased in the week ended April 4th but still came in well above economist estimates, according to a report released by the Labor Department on Thursday.

The report said 6.606 million people filed for unemployment last week, a decrease of 261,000 from the previous week's upwardly revised level of 6.867 million.

Economists had expected jobless claims to drop to 5.250 million from the 6.648 million originally reported for the previous week.

The spike in initial jobless claims in the latest week brings the total since the coronavirus-induced shutdown to 16.780 million.

"That is just over half the nearly 30 million in job losses we expect to result from the spread of the coronoavirus, which would be three times the number of job losses that occurred during the Global Financial Crisis," said a note from economists at Oxford Economics.

They added, "We expect about 24 million in job losses in April, pushing the unemployment rate up to around 14%, while further job losses in May are set to push the unemployment rate to 16%."

The Labor Department said the less volatile four-week moving average spiked to 4,265,500, an increase of 1,598,750 from the previous week's revised average of 2,666,750.

Continuing claims, a reading on the number of people receiving ongoing unemployment assistance also skyrocketed by 4.396 million to 7.455 million in the week ended March 28th.

With the substantial increase, continuing claims reached their highest level in the history of the seasonally adjusted series. The previous high was 6,635,000 in May of 2009.

The four-week moving average of continuing claims surged up to 3,500,000, an increase of 1,439,000 from the previous week's revised average of 2,061,000.

Last Friday, the Labor Department released a separate report showing employment in the U.S. fell much more than expected in the month of March.

The report said employment plunged by 701,000 jobs in March after jumping by an upwardly revised 275,000 jobs in February.

Economists had expected employment to slump by 100,000 jobs compared to the addition of 273,000 jobs originally reported for the previous month.

With the much bigger than expected drop in employment, the unemployment rate surged up to 4.4 percent in March from 3.5 percent in February. The unemployment rate had been expected to climb to 3.8 percent.

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