These 10 states are showing early signs of a job market recovery

The number of jobs lost due to the coronavirus shutdown continue to mount, with the latest weekly total of Americans applying for unemployment benefits coming in above 1.5 million, yet again. Yahoo Finance's Zack Guzman and Heidi Chung discuss.

Video Transcript

ZACK GUZMAN: The markets reacting to the update we got from the Department of Labor in terms of unemployment claims. That number exceeding the expectations economists had. The total tally coming in at 1.87 million Americans filing for unemployment benefits in the week ended May 30. And for more on what we're seeing in that report, not necessarily the direction economists want to see ahead of tomorrow's big jobs report, I want to get to Yahoo Finance's Heidi Chung who has more details. Heidi?

HEIDI CHUNG: Hey, Zack. Yeah, so for the first time in 10 weeks, the weekly jobless claim number came in below 2 million. Last week, another 1.88 million Americans filed for unemployment benefits, exceeding economists' estimates for 1.84 initial jobless claims for the week. The prior week's figure was revised higher to 2.13 million from the previously reported 2.12 million. And up for peaking in the week ending March 28, the weekly number, though, has been on a steady decline. But so far, over the past 11 weeks, more than 42.6 million Americans have filed for unemployment benefits.

Last week's report showed that continuing claims declined for the first time since the pandemic hit the US. But in this week's report, continuing claims increased to 21.49 million in the week ending May 23 from 20.84 million in the previous week. Consensus estimates there were for 20 million continuing claims. And pandemic unemployment assistance program claims, which include those who were previously ineligible for unemployment insurance, such as those that are self-employed and contracted workers, fell to 623,000 last week from the prior week's 1.3 million.

Looking at the states, though, that reported the highest number of claims last week, California reporting the highest number of jobless claims at an estimated 230,000 on an unadjusted basis, and that is up from 203,000 in the previous week. Florida had 206,000, up from 175,000. Georgia reporting 148,000 and Texas with roughly 107,000 initial jobless claims.

Now, today's weekly jobless claims report comes on the heels of yesterday's ADP private employment report and ahead of the highly-anticipated May jobs report tomorrow morning. Economists estimate that the US economy shed 8 million non-farm payrolls in May, following a record 20.54 million job losses in April. And Zack, the unemployment rate is expected to surge to its highest level since the Great Depression to a whopping 19.5% from 14.7% in April. So certainly, all eyes tomorrow will be on the US economy, and specifically the labor market.

ZACK GUZMAN: Yeah, it's kind of tricky to tease that out when we think about the better number that we got on the ADP side and then, you know, the under-performance of the number that we got today and what that could mean when you look to tomorrow. Of course, as we like to do, breaking it down state by state, highlighting some of those states in a different way this week.

Looking at the five weeks that we saw as the coronavirus pandemic hit the employment picture here in the US as states went into lockdown, comparing that five week performance in terms of jobless claims filings that we saw in the initial period to the five weeks that we've just seen, the most recent five weeks, interesting to note some states showing a bit more of a stronger turning of the tide here when you think about stopping the bleeding in job losses. Those would be Rhode Island, Vermont, Michigan, Montana, and Idaho, all showing about a 75% drop when you compare those two time periods in the number of initial jobless claims.

So maybe those states showing a little bit more of a stronger start in trying to return to normal. Of course, it's worth noting that none of those states are showing numbers anywhere close to what we saw in terms of initial jobless claims before the pandemic hit here. So still a long way to go but at least noteworthy to highlight those states.

On the flip side, as we've shown in prior weeks, Florida and Georgia still remain some of the hardest-hit states, in terms of the overall spike in unemployment claims, and those states, on the flip side, not showing any material progress in terms of the five weeks when this first started to the five weeks now, only seeing about a 30% drop in terms of weekly-- average weekly jobless claims numbers in those states. So not necessarily optimism on that front.