WASHINGTON, June 18 (Xinhua) -- First-time jobless claims continued to decline last week as states ease COVID-19 containment measures in the United States. But economists argued that unemployment rate stays high and recovery remains uncertain, calling for more government relief.
The number of initial jobless claims totaled 1.5 million in the week ending June 13, marking the 11th weekly decline in a row but remaining high on a historical basis, the U.S. Labor Department reported Thursday.
"Weekly first-time unemployment claims fell by only 58,000 in mid-June, which was much less than consensus estimates," Mark Vitner and Matthew Honnold, economists at Wells Fargo Securities, wrote in an analysis, noting that the smaller decline likely reflects some "moderation" in the pace of re-openings.
The new report also showed that the four-week moving average, a method to iron out data volatility, decreased by 234,500 to reach over 1.77 million.
The total number of people claiming benefits in all programs -- state and federal combined -- for the week ending May 30 was 29.1 million, a decrease of 375,522 from the previous week, according to the report.
U.S. Federal Reserve Chairman Jerome Powell said in a virtual congressional hearing on Tuesday that despite the economy bouncing back, "the levels of output and employment remain far below their pre-pandemic levels."
MORE RELIEF NEEDED
Noting that the unemployed will be hard pressed to find work, Powell said they are going to "need support," without making specific suggestions for Congress on future fiscal policy actions.
Also on Tuesday, more than 100 economists, including two former chairs of the Federal Reserve, three former chairs of the Council of Economic Advisers, and two Nobel laureates implored Congress to immediately pass a "multifaceted relief bill of a magnitude commensurate with the challenges our economy faces."
The economists said Congress must pass another economic recovery package before most of the support in the 2.2-trillion-dollar CARES Act, or the Coronavirus Aid, Relief, and Economic Security Act, expires this summer.
"Given current projections of economic need, this new bill should provide, at a minimum, continued support for the unemployed, new assistance to states and localities, investments in programs that preserve the employer-employee relationship, and additional aid to stabilize aggregate demand," the economists noted.
Among the signers is Jason Furman, former chairman of President Barack Obama's Council of Economic Advisers, who said Thursday that expanded unemployment insurance should continue and adjust with changes in the unemployment rate.
"The abrupt expiration of any form of expanded unemployment insurance at the end of July would create problems both for those workers directly affected and for the economy as a whole, reducing GDP by about 2.5 percent in the second half of this year -- more than a typical year's worth of economic growth," Furman said in a Congressional hearing.
Furman, currently a professor at Harvard University, also said that the officially reported unemployment rate of 13.3 percent in May understates the true extent of unemployment, arguing that a "realistic unemployment rate" would be 17.1 percent.
"The unemployment rate will remain at a recessionary level for some time," Furman said, noting that the Congressional Budget Office (CBO) projects that if no additional legislation is passed by Congress, the unemployment rate will be 11.5 percent at the end of 2020.
Democratic lawmakers have been seeking to extend added unemployment benefits of 600 dollars a week under the CARES Act, but Republican lawmakers argue that continuing the federal payments would discourage the unemployed from returning to work.
AN UNCERTAIN RECOVERY
At its policy meeting last week, the Federal Reserve kept its benchmark interest rate unchanged at the record-low level of near zero, and projected interest rates to remain at the current level through at least 2022.
The central bank also projected that the U.S. economy will shrink by 6.5 percent in 2020, followed by a 5-percent gain next year.
As reopening efforts continue across the nation and employment starts to pick up, Powell said that "we have a long road ahead of us to get those people back to work," especially those who work in the service industries.
As of Thursday night, over 2.1 million confirmed COVID-19 cases have been reported in the country, with death toll surpassing 118,000, according to a data tracking tool developed by Johns Hopkins University.
Several U.S. states, including Arizona, California, Florida, Oklahoma, Oregon and Texas have seen an uptick in coronavirus cases, casting doubt on whether officials should continue down current paths to reopen the economy.
Florida, for example, reported about 3,200 new cases on Thursday -- the largest single-day spike the state has seen since the beginning of the pandemic, according to data from the Florida Department of Health.
Calling the situation "very unsatisfactory," Jeffrey Sachs, a renowned economics professor at Columbia University, told Xinhua earlier this week that as the virus continues to spread rapidly, the federal government has "basically lost interest" in controlling the virus.
"The results are likely to be very bad: a big resurgence of disease and deaths," said Sachs, who is also a senior United Nations advisor.
Powell said significant "uncertainty" remains about the timing and strength of the recovery.
"Much of that economic uncertainty comes from uncertainty about the path of the disease and the effects of measures to contain it," said the Fed chairman. "Until the public is confident that the disease is contained, a full recovery is unlikely."
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