Another 1.87 million Americans filed for unemployment benefits last week, but with all 50 states gradually reopening their economies, the job losses triggered by the coronavirus pandemic and the ensuing lockdown are beginning to slow.
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Economists surveyed by Refinitiv forecast 1.8 million.
The weekly jobless claims report from the Labor Department, which covers the week ended May 30, pushes the 11-week total of losses since states directed residents to stay at home and forced nonessential businesses to roughly 42 million, a rate of unemployment unseen since the Great Depression.
Still, the report suggests the worst is over for the labor market: It marks the ninth straight weekly decline of Americans seeking jobless benefits since claims peaked at the end of March.
"This is a terrible number, but weekly jobless claims have been on the decline over the past few weeks, as states across the country start to ease the coronavirus-driven lockdowns," said Mark Tepper, the president and CEO of Strategic Wealth Partners. "This trend has been priced into the stock market over the past few weeks."
That's combined with a Wednesday report from payroll processing firm ADP, which revealed that private employers lost 2.76 million jobs in May. While that's well above pre-crisis levels, it was significantly better than the 9 million expected by Refinitiv economists.
But even as the labor market starts to recover from the virus outbreak, the data indicates that some jobs may be stubbornly slow to return. Continuing claims, the number of people receiving benefits after an initial week of aid, saw a gain of 649,000 over the past week, totaling 21.5 million.
"The rise in continuing jobless claims is worrisome," Tepper said, "because it means people remained unemployed and didn't return to work."
The four-week moving average was 22.4 million, down 222,500 from last week's revised average.
States that saw the biggest decline in unemployment claims were New York, which dropped 106,106 from the previous week. It was followed by Michigan, which declined by 23,539 and Texas, which fell by 20,896. California, however, saw claims jump by 27,199, while Florida saw theirs increase by 31,083.
It precedes the government's more closely watched employment report for May, which is scheduled for release Friday at 8:30 a.m. ET. Refinitiv economists expect it to show the economy shed 8 million jobs last month and unemployment surged to 19.8 percent, a post World War II record.