The ongoing effect of the coronavirus pandemic on the job market will be illustrated Thursday morning when the Department of Labor issues its initial weekly unemployment claims data.
Economists estimate that another 2.5 million Americans, after 3.17 million jobless claims in the previous week, applied for jobless insurance in the week ending May 9. Over 33 million Americans have filed for jobless compensation claims in the past seven weeks.
If Thursday's figures are close to projections, it would be an increase from the previous week when, according to the Labor Department, 3.2 million Americans applied for unemployment.
Economists say the widespread job cuts and retrenchments will not end as long as America's richest sectors - the northeastern zone - is on lockdown. A huge portion of blue collar, service sector America is living based on government checks at this point; checks that will run out much faster than the returns from the pre-crisis employment market.
The continuing loss of jobs continues to ravage the global economy and is extremely elevated, Blerina Uruci, an economist with Barclays, disclosed. "We're still far from a normalization in the jobs market," he said.
The end of the pandemic is far from over for an American economy that is battered by the coronavirus, but analysts at Goldman Sachs believe light is beginning to appear at the other end of the tunnel.
US gross domestic product will collapse by almost 40 percent in annualized rate in the next three months, worse than a previous outlook of a 35 percent drop, Goldman market planners led by Jan Hatzius, wrote in a note on Wednesday.
The country's GDP in the third quarter is seen to return to 28 percent annualized rally, much better compared to an initial projection of 18 percent. For the full 2020, Goldman estimates growth retreating by 6.4 percent.
US Federal Reserve chief Jerome Powell has warned of the dangers of an extended market turmoil resulting from the global health crisis and has called on Congress and the White House to act further to avert a long-lasting economic collapse.
The central bank and Congress have undertaken wide-reaching measures to try to combat what is seen to be a severe downturn due to the widespread lockdown of the US economy. But Powell cautioned that several bankruptcies among small enterprises and prolonged joblessness for many individuals remain a serious problem.
Continuing jobless claims, which lags data on initial unemployment claims by a week, are estimated to reach 25.12 million in the week ending May 2. The previous week saw a record 22.65 million continuing claims.
