Another 2.438 million Americans file for unemployment benefits

An additional 2.438 million Americans filed for unemployment benefits in the week ending May 16, amid the coronavirus pandemic. Yahoo Finance’s Zack Guzman and Heidi Chung break down the details.

Video Transcript

ZACK GUZMAN: Right now I want to kick it off with the update that we get every Thursday on the unemployment front. As the number continues to dwindle lower, but still high on historic standards, we got an additional 2.4 million Americans applying for unemployment benefits in the week ended May 16. That was in line with what economists were expecting, but still a rather large number when you consider that the largest that we had was about 700,000 back in the Great Recession. For more on this report, I want to get to Yahoo Finance's Heidi Chung, who has more details on that. Heidi?

HEIDI CHUNG: Hey, Zack. Yeah, another week, another weekly jobs-- jobless claims report in the millions. Like you mentioned, another 2.4 million Americans filed for unemployment benefits last week, which was slightly higher than the 2.4 million initial jobless claims expected by analysts. The prior week's figure, though, was revised lower to 2.69 million from the previously reported 2.98 million.

Now, even though that weekly figure has been steadily declining after hitting a record in the week ending March 28, so far, over the past nine weeks, a total of roughly 38.6 million Americans have had to file for unemployment insurance. And continuing claims, which lags initial jobless claims data by one week, totaled a record 25.07 million in the week ending May 9, following 22.59 million in the previous week. Economists were expecting 24.25 million continuing claims for the week.

Now, looking at some of the states here that recorded the highest number of jobless claims last week, California again topping the list, reported the highest number of claims, at an estimated 246,000 on an unadjusted basis. And that is up from 213,000 in the previous week. New York, at number two, had 227,000 claims, and that was up from 199,000. Florida reporting 224,000, and Georgia had roughly 177,000 jobless claims.

Now, with that weekly number stabilizing a bit, of course, it's still very high, but it has been on that decline, like we mentioned, economists now have been talking a lot about continuing claims and that number, saying that that is the focal point, and investors should really be paying attention to that. Today, Capital Economics saying in a note, quote, "The sharp rise in continuing claims this past week before illustrates that the easing of lockdowns in many states has not yet resulted in any large scale recall to work for those temporarily laid off."

Now, I think that's a really important point to pay attention to, Zack, the fact that we've seen Georgia, along with several other states, reopen for quite some time. But it seems as if there's a bit of divergence. On one hand, we have a lot of states playing catch-up to those hefty backlogs that we have seen when it came to jobless claims. And on the other hand, we have economies reopening here. So we're still waiting to see those jobless claims numbers in states like Georgia start to steadily decline. But we have not yet seen very good evidence of that yet, Zack.

ZACK GUZMAN: That's a good point. When you think about the trade-off between opening up and the impact to the economy in these states, and Georgia does stand out as being one of the first to make the move to reopen, but it also stands out when you look at the metric we like highlighting here, the rolling average of citizens applying for unemployment claims over the last eight weeks. You look at that in Georgia, by far the hardest hit state, a more than 4,600% jump over before all of this happened.

When you look at that in the state of Georgia, it's-- it's pretty high. It tops the rest of the country, followed by Florida, Kentucky, Virginia, and Louisiana. As we've highlighted, the South clearly hit hard by the spike in jobless claims here and something that, as you noted, Heidi, does not necessarily seem to be letting up. I mean, we've seen the number come down this week for the state of Georgia, but overall still holding in rather high terms, not necessarily what you would like to see when you think about the economy opening up and expecting, as a lot of economists did, when you think about a V-shaped recovery, a lot of those jobs coming back, but not necessarily what we're seeing on those fronts.

And also, Heidi, as you highlighted on the continuous claims front, it does look like some of these states did have problems actually getting applications through. On the unemployment front, you can look at Florida and Georgia and the way that they haven't necessarily been able to meet all that. We talked about the insane traffic hitting these state sites as well. So I guess that's showing up in the data as well.

HEIDI CHUNG: Yeah, Zack, and I think a lot of economists out there are saying, well, we are seeing that weekly number decline. And so a lot more focus has been on those states, of course the ones that are reopening but also the ones with larger population, such as California and New York. It's largely expected that those backlog were extremely large at the time. So it makes sense that we are seeing a bit of that uptick there.

But like you mentioned, Georgia very much in focus, as that state looks to reopen most of its economy at this point. But yeah, every week we are still seeing the number above in the millions there, so it's still quite concerning going forward. Again, that [INAUDIBLE] number over almost at 40 million just over the past nine weeks, Zack.

ZACK GUZMAN: Yeah, and as you highlight California, New York, the total amount paid between all these people applying for unemployment, $4.5 billion in the month of April compared to about $654 million last year in April, just a staggering increase. Obviously, we're highlighting how many people are applying for it, but still on the dollar front, pretty shocking to talk about. But Heidi Chung, appreciate you bringing us that.