Economic Report: Jobless claims set to top 1 million again, but what’s worse is the agonizingly slow decline in people getting unemployment benefits

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More than 1.3 million new applications for unemployment benefits were likely filed in mid-June to push the total during the coronavirus pandemic above 48 million, but such shocking numbers don’t really tell us much about whether the U.S. labor market is on the mend.

See:MarketWatch economic calendar and forecasts

Economists have turned their lens to another figure in the weekly report that reflects how many unemployed workers are actually receiving benefits. These so-called continuing jobless claims have tapered off since peaking in the middle of May and economists will look for the third decline in the past four readings.

Another drop in continuing claims would obviously be a good sign, signaling that more people are leaving the unemployment rolls and returning to work. A nationwide lockdown ended in May as states reopened and the economy began to recover from what’s likely to be the deepest, if shortest, recession in American history.

Still, the decline in continuing claims has not been as rapid as Wall Street and Washington would like.

Read:Retail sales surge a record 17.7% in May, but gaping coronavirus wounds still visible

Continuing claims processed traditionally through state unemployment offices fell by less than 200,000 to 18.9 million in the week ended May 30. And they’ve only declined 17% since hitting a record 22.8 million earlier last month.

Even those stunningly high figures don’t tell whole story, though. Continuing claims are closer to 28 million if applications filed through a temporary federal-relief program are included. These numbers are reported with an ever-greater delay of two weeks.

Read:Consumer sentiment climbs again as reopening U.S. economy eases worries

If the labor market is making a rapid recovery and millions of people really are returning to work, economists say, the evidence should show up soon through a bigger decline in continuing claims.

“We are becoming increasingly perplexed by relatively stable jobless claims that should be dropping rapidly if net rehiring is occurring,” economist Andrew Hollenhurst of Citibank wrote in a recent report.

Read:Housing starts climb 4.3% in May as buyers return and builders speed up work

Which is why economists also worry about the still-elevated rate of new jobless claims.

They’ve yet to fall below 2 million a week since March 21 if state and federal applications are combined. The fear is that many layoffs that were as first seen as temporary are now becoming permanent as executives and small-business owners realize the scope of the decline in sales.

In any case, there’s an added importance to new claims in the most recent seven-day period ended June 13. The government’s survey of businesses and households used to compile the monthly employment report took place during the same week.

A larger-than-expected decline in new claims would suggest net employment rose sharply in June, likely surpassing the 2.7 million increase in May.

A small or no decline would lower Wall Street expectations for the government’s June employment report when it comes out in early July and probably weigh on the stock market DJIA, -0.64% .