U.S. weekly unemployment claims subside, millions still jobless

The United States reported that business layoffs are subsiding. However, millions who lost their jobs due to the novel coronavirus pandemic still resort to unemployment benefits. This indicated that the labor market would take time to recuperate from the virus crisis even as firms resume accepting job applications.

The weekly jobless claims report from the Labor Department will come parallel to last Friday’s data of a surprise 2.5 million increase in nonfarm payrolls in May. This could uplift sentiments that the labor market is faring better and the worst is already over.

The Federal Reserve pledged to provide immense economic support as policymakers foresee a 9.3% unemployment rate by the end of the year. The unemployment rate advanced 13.3% in May, far larger than the 3.5% record monitored in February.