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May 21, 2020, 11:09 a.m. EDT

Jobless claims jump 2.4 million in mid-May — but the number is almost 1 million higher when federal filings are included

Coronavirus-tied layoffs still rising even as more states reopen

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By Jeffry Bartash, MarketWatch

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About 6.1 million appeared to be receiving benefits through the federal program as of the week ended May 2, the most recent figures available.

Not all the states have reported these claims, and they have been subject to large revisions, making it hard to determine how accurate they are and to incorporate them into the broader unemployment picture. Labor officials warn it may be awhile until the data get sorted out.

Whatever the case, the devastation has been unprecedented. The unemployment rate shot up in April to almost 20%, unofficially, according to a close reading of the government’s report. The official estimate was 14.7%.

Read: Great Depression 2020? The unofficial U.S. jobless rate is at least 20% — or worse

Also: Fed’s Rosengren sees unemployment rate still at double-digit levels at year end

Before the viral outbreak, new jobless claims were in the low 200,000s. Only about 1.7 million Americans were collecting benefits. The unemployment rate was at or near a half-century low of 3.5%.

The big picture: The historic pace of layoffs has tapered off since peaking at the end of March, but unemployment has already ballooned to the highest level since World War II.

Facing pressure to reopen, all 50 states have lifted some restrictions imposed during what was effectively a nationwide lockdown, but the effort to reopen the economy has been slow going.

Read: The economy is finally recovering, but COVID-19’s ill-effects aren’t going away

The U.S. is in a race for time: The longer it takes to fully reopen, the more likely that millions of seemingly temporary job losses become permanent. If that happens, the jobless rate is likely to remain above 10% through the end of the year and hinder a recovery.

See: MarketWatch Coronavirus Recovery Tracker

What they are saying?: “The key point here is that the trend is rising strongly, signaling that most of the people who have been laid off due to [effects of the COVID-19 pandemic] remain unemployed,” said chief economist Ian Shepherdson of Pantheon Macroeconomics.

Market reaction: The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.47% and S&P 500 /zigman2/quotes/210599714/realtime SPX -0.84% fell in Thursday trades.

/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,901.98
-130.40 -0.47%
Volume: 439.89M
Sept. 17, 2020 5:14p
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/zigman2/quotes/210599714/realtime
US : S&P US
3,357.01
-28.48 -0.84%
Volume: 2.74B
Sept. 17, 2020 5:14p
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Jeffry Bartash is a reporter for MarketWatch in Washington.

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