WASHINGTON (Reuters) – Millions more Americans likely filed for unemployment benefits last week as backlogs continue to be cleared and disruptions from the novel coronavirus unleash a second wave of layoffs, pointing to another month of staggering job losses in May.


The Labor Department’s weekly jobless claims report on Thursday, the most timely data on the economy’s health, could also offer some early clues on how quickly businesses rehire workers as they reopen and of the success of the government’s Paycheck Protection Program (PPP).

“None of these states had systems set up to process the unprecedented amount of claims in one fell swoop, so there are backlogs,” said Steve Blitz, chief U.S. economist at TS Lombard in New York. “We continue to read of firms cutting their workforce and these are firms that were not immediately impacted by the mandated contraction from COVID-19.”

A broad shutdown of the country in mid-March to contain the spread of COVID-19 has resulted in the worst labor market since the Great Depression and undermined the broader economy.

Initial claims for state unemployment benefits likely totaled a seasonally adjusted 2.4 million for the week ended May 16, according to a Reuters survey of economists. Data for the prior week is likely to be revised to show applications substantially down from the previously reported 2.981 million after Connecticut said it had misreported its numbers.

Claims have been gradually declining since hitting a record 6.867 million in the week ended March 28. Economists said claims were also being kept elevated as states were now processing applications for gig workers and many others to access federal government benefits. These workers generally do not qualify for regular unemployment insurance, but to get federal aid for coronavirus-related job losses they must first file for state benefits and be denied.