Another 2.1 million unemployment claims were filed last week, the Labor Department reported Thursday, pushing the total past 40 million — the equivalent of one out of every four American workers — since the coronavirus pandemic grabbed hold in mid-March.
The report marks the eighth week in a row that new jobless filings dipped from the peak of almost 6.9 million, but the level is still far above historic highs.
The latest claims may be not only a result of fresh layoffs, but also evidence that states are working their way through a backlog. And overcounting in some places and undercounting in others makes it difficult to measure the layoffs precisely.
Under the Pandemic Unemployment Assistance program, Congress approved an expanded palette of jobless benefits that included freelancers, self-employed and gig workers and others who would not normally qualify under state rules. But many states, flooded with applicants, were slow to put the program into effect, and those eligible may not yet be fully reflected.
“When we think about what to do when benefits expire, it would be helpful to know how many people are actually getting them,” said Elizabeth Pancotti, a research assistant at the National Bureau of Economic Research. While the Labor Department reports may be the best source of information, she said, they offer an “incomplete picture.”
The Trump administration will not issue a midyear update to its economic forecasts this summer, breaking decades of tradition amid the uncertainty of a pandemic recession, officials confirmed on Thursday.
The decision will spare the administration from having to reveal its internal projections for how deeply the recession will damage economic growth and how long the pain of high unemployment will persist.
When the administration last published official projections in February, it forecast economic growth of 3.1 percent from the fourth quarter of 2019 to the fourth quarter of 2021, and growth rates at or around 3 percent for the ensuing decade. It forecast an unemployment rate of 3.5 percent for the year.
The virus has rendered those projections obsolete. Unemployment could hit 20 percent in June, White House economic adviser Kevin Hassett told CNN this week. The Congressional Budget Office said in April that it expects the economy will contract by 5.6 percent this year and end with unemployment above 11 percent.
The White House is required by law to issue both an annual budget and a midyear update to it, called a “mid-session review.” Updating economic projections in the mid-session review is optional, but it is a practice that administrations — including President Trump’s — have widely followed since the review was mandated by Congress in 1970.
A senior administration official defended the decision not to publish updated forecasts, saying the economic uncertainty caused by the virus “would produce a less instructive forecast.” The official, who declined to be identified, also said the White House was under no legal obligation to release the revised forecast.
The decision not to release updated projections was first reported by The Washington Post.
Wall Street’s rally eases after new jobless data.
U.S. stocks were searching for direction on Thursday, amid rising tensions between the United States and China and another bleak report on the U.S. labor market.
The S&P 500 was slightly higher in early trading, but the Nasdaq composite was lower, dragged down by shares of big technology companies. European markets were up about 1 percent after a mixed day in Asia.
The U.S. Labor Department’s weekly report on unemployment claims, released Thursday morning, showed more than two million filings last week as the surge of layoffs continues. More than 40 million claims have now been filed since the coronavirus pandemic took hold. Also on Thursday, the Commerce Department said the U.S. economy shrank at a 5 percent pace in the first three months of the year, revising its earlier estimate of a 4.8 percent drop. In a separate report, the department said new orders for U.S. manufactured goods plunged by 17.2 percent in April, after a 16.6 percent drop in March.
Investors were also parsing heated rhetoric between the United States and China over Hong Kong, which drove the Hang Seng Index in the semiautonomous Chinese city down 0.8 percent late in the trading day. China’s legislature on Thursday approved a plan that would see many of mainland China’s security practices broadened to Hong Kong. The Trump administration signaled Wednesday that it was likely to end some or all of the U.S. government’s special trade and economic relations with Hong Kong because of the move.
Stocks on Wall Street have finished higher for the last two days as investors focused on the prospect of economic recovery. The S&P 500 rose 1.5 percent on Wednesday, after climbing 1.2 percent the day before.
The staggering unemployment figures — devastating as they are — do not fully capture the degree to which the coronavirus has disrupted professional life across the country.
Since March, when the crisis began to shut businesses en masse, a generation of professionals has seen careers enter a state of suspended animation. Hiring has dried up, advancement has ceased, job searches have been put on hold and new ventures are in jeopardy. As a result, even well-connected high earners are suddenly in unfamiliar territory.
“There is deep uncertainty,” said Alisa Cohn, an executive coach who works with companies including Google and Pfizer. “We’re not just in a holding pattern. We’re on our way somewhere new, but we don’t know what it looks like.”
In March, Hasti Nazem, 35, left a start-up she helped found. Two months later, the job market has imploded, promising leads have dried up, and she is stuck in limbo. She is mining her network for introductions, but still without a full-time job.
“I’m mostly having Zoom calls with strangers,” she said.
Such an order, which officials said was still being drafted and was subject to change, would make it easier for federal regulators to argue that companies like Facebook, Google, YouTube and Twitter are suppressing free speech when they move to suspend users or delete posts, among other examples.
The move is almost certain to face a court challenge and is the latest salvo by President Trump in his repeated threats to crack down on online platforms. Twitter this week attached fact-checking notices to two of the president’s tweets after he made false claims about voter fraud, and Mr. Trump and his supporters have long accused social media companies of silencing conservative voices.
White House officials said the president would sign the order later Thursday, but they declined to comment on its content. A spokesman for Twitter declined to comment.
Nissan said on Thursday it would close plants in Spain and Indonesia and cut global production by 20 percent as it seeks to remake itself into a smaller, more efficient automaker, an announcement that comes as it reported its first annual loss in 11 years.
The Japanese automaker said it needed to cut 300 billion yen ($2.8 billion) in costs as it works to recover from a year marked by plunging sales, a drawn out legal fight with its former chairman Carlos Ghosn, and a bruising falling out with Renault, its partner in the world’s largest auto-making alliance.
In a statement, Nissan said it took a net loss of $6.2 billion, its worst performance since the 2008 financial crisis. It joined Japan’s other major automakers in declining to provide an earnings forecast for the coming year because of uncertainty surrounding the coronavirus’s economic effects.
Nissan’s chief executive, Makoto Uchida declined to say how many jobs would be lost because of the plant closings in Spain and Indonesia.
Nissan was already struggling before the pandemic hit. Sales volume dropped by 10.6 percent through the end of the fiscal year in March, significantly outpacing the overall decline in the global market.
On Wednesday, Nissan and Renault said they had put their differences aside as they are forced to pull closer together to survive the worst economic crisis in a generation. To help achieve that goal, Nissan said it would need to winnow down its product lineup and reduce production capacity through restructuring and closures.
The British low-price airline easyJet said on Thursday that it planned to reduce staff by up to 30 percent and that it expected to fly in the July-September period at nearly 30 percent of the capacity a year earlier.
“We are having to consider very difficult decisions which will impact our people,” said the airline’s chief executive, Johan Lundgren.
The announcement from easyJet, which mainly serves Europe and has over 15,000 employees, comes as the company aims to resume a small number of routes across Britain and France beginning June 15. “We expect demand to build slowly, only returning to 2019 levels in about three years’ time,” the statement said.
When flights restart, staff and passengers will be required to wear masks and, at least initially, no onboard food service will be offered, the company said. EasyJet recently signed two loans totaling 400 million pounds, or about $490 million, maturing in 2022.
As airlines emerge from coronavirus lockdowns, low-cost airlines across Europe are pressuring airports to cut charges in return for resuming flights, as they contend with larger, traditional carriers. EasyJet, Wizz Air and Ryanair are among airlines demanding fee discounts or waivers from airports, Reuters reported Thursday.
Catch up: Here’s what else is happening.
The activist investor Carl Icahn sold his 55 million-share stake in the car rental giant Hertz, in what he described in a securities filing on Wednesday as a “significant loss.” The Hertz stock had traded at $15 per share for months before spiking in February and then crashing, resulting in a bankruptcy filing last week. Mr. Icahn sold the shares at $0.72 each.
The American division of the bakery chain Le Pain Quotidien filed for bankruptcy protection on Wednesday, a sign of the damage the pandemic has inflicted on the fast-casual industry. To keep some of its stores open, the company has proposed a sale to the restaurant company Aurify Brands.
Social-distancing measures, put in place to help stop the spread of the coronavirus, have hurt sales of gum and mints, the Hershey Company said on Wednesday in a regulatory filing to announce a bond offering. Demand for some products increased when the pandemic began, but have since leveled off. The company said it expected the pandemic would have a significant impact on earnings in the second quarter, when lockdown orders were put in place.
Reporting was contributed by Patricia Cohen, Kate Conger, Maggie Haberman, Niraj Chokshi, Ben Dooley, Geneva Abdul, Mohammed Hadi, Jim Tankersley, David Gelles, David Yaffe-Bellany, Carlos Tejada, Katie Robertson and Gregory Schmidt.