IN further signs of the crisis facing the world’s largest economy amid the coronavirus pandemic, new data yesterday showed a record plunge in US exports as layoffs exceeded 42 million.

The two key reports on economic health indicate that even as Wall Street regains its strength and some industries show signs of recovery as virus lockdowns ease, the United States is not out of the woods yet.

The Labour Department said 1.87 million workers filed new jobless claims last week, 249,000 fewer than the week prior but still a grievous figure nearly three times higher than the weekly record in the pre-pandemic economy.

“This and other indicators suggest not that the job market is improving, but that it’s getting bad less quickly,” Jared Bernstein, senior fellow at the Centre on Budget and Policy Priorities think-tank, said on Twitter.

The decline in initial claims means the wave of layoffs caused by businesses closures ordered in mid-March to stop the spread of Covid-19 are slowing. 

More than 42 million workers have lost their jobs, at least temporarily, since mid-March, but the new data showed 21.5 million people were receiving benefits in the week ended May 23, an indication that millions either had their benefit claims rejected or have since been rehired, or more likely a combination of the two.

After falling last week, the insured unemployment rate ticked up half a point to 14.8% – a huge number of Americans not working, but that only reflects those with unemployment benefits.

That is a grim omen for today, when the Labour Department releases the all-important May jobs report, which will likely show national unemployment climbing to around 20% from 14.7% in April, which was the highest unemployment rate in 90 years.

Wall Street indices muddled through the day, with the Dow ending up just 0.1% and the S&P 500 and Nasdaq both closing lower, ending three days of gains that Peter Cardilo of Spartan Capital Securities said were “a little overboard” ahead of the unemployment report.

However, Labour Secretary Eugene Scalia said he remains confident the jobless rate will fall below 10% by year end, telling Fox News, “Many of these jobs will come back quickly because they were still there”.

Meanwhile, the Commerce Department reported that US exports and imports dropped by a record amount in April and the trade deficit jumped more than US$7 billion (RM31 billion) to US$49.5 billion as the coronavirus shuttered businesses and closed down transportation worldwide.

Compared to March, exports of US goods and services fell more than 20 %or US$39 billion to US$151.3 billion, the lowest level in 10 years. 

Imports in the month dropped to US$200.7 billion, a more modest 13.7% or US$32 billion decrease.

The impact of the Covid-19 shutdowns were widespread throughout the data and in all industries and products, including aircrafts, air travel, oil, auto parts and clothing.

Travel alone fell nearly US$3 billion in the month, the report said. – AFP, June 5, 2020.