Recent initial jobless claims have begun to slow, offering hope that the impact of the COVID-19 pandemic is slowing.
However, a comparison with the continuing job claims reveals that economic stability is still pending.
The analysis in the chart provides clarity on how the job market is fairing. The peak and then decline of the initial claims shows that layoffs and furloughs have slowed. Nevertheless, continuing claims have risen steadily to over 25 million.
As the nation reopens slowly, continuing claims should decline. This would indicate that the vast majority of these claims were related to furloughs.
However, if the continuing claims increase, it may well indicate that the jobs market has suffered lasting setbacks. With so many out of work, the overall economic downturn could be longer term.
Already Treasury Secretary Steven Mnuchin has indicated that the economic recovery could take longer than expected. Additionally, Federal Reserve Chairman Jerome Powell made it clear that the economy would take until the end of 2021 to bounce back.