Make Kitco Your Homepage

Another 5.25 million Americans file U.S. initial jobless claims; gold prices remain higher

Kitco News

Editor's Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today's must-read news and expert opinions. Sign up here!

Editor's Note: updating earlier story to include more details from report, comments from economist and updated prices.

(Kitco News) - Another 5.25 million Americans filed for first-time U.S. jobless claims in the week to Saturday, the Labor Department said Thursday.

As of 8:45 a.m. EDT, spot gold pared its early gains, but was still trading up $9.90 to $1,725.90 an ounce.

Consensus expectations compiled by news organizations called for initial jobless claims to be around 5 million to 5.5 million. The previous week’s 6.61 million claims were revised to 6.62 million.

This was the fourth straight week that new claims topped 3 million after the previous all-time high had been 695,000 back in October 1982, according to Labor Department figures. Markets are closely monitoring the data for a barometer of the damage to the U.S. economy due to lockdowns and social-distancing measures across the country to combat the spread of the COVID-19 pandemic, with many businesses temporarily closing their doors.

However, with the new claims down from the prior week, the data suggest that the weekly increases in claims may be past their peak, said Andrew Grantham of CIBC Economics.

This was the fifth straight week the Labor Department issued a statement attributing a rise to layoffs as a result of the COVID-19 outbreak. The increase was especially pronounced the last four weeks, with a total 22.03 million claims filed during this time period.

Grantham said the cumulative rise in initial claims over the past month represents almost 15% of the previously employed population, and the data are still ahead of the survey week for April nonfarm payrolls data, which is being collected this week.

“However, the fact that continuing claims aren't rising quite as quickly as previous initial claim figures would have implied, suggesting that at least some of the claims have been short-term in nature, and accounting for a likely drop in labor-force participation, we don't expect the increase in unemployment rate to be quite as severe as this,” Grantham said. “The 12-13% peak we forecast for the unemployment rate in Q2 would still, admittedly, easily surpass the peak of the 2008-9 financial crisis.”

Meanwhile, the four-week moving average for new claims – often viewed as a more reliable measure of the labor market since it smooths out week-to-week volatility – rose by 1.24 million to 5.51 million.

Continuing jobless claims, which counts the number of people already receiving benefits and reported with a one-week delay, increased by 4.53 million to a seasonally adjusted 11.98 million during the week ending April 4, the government said. This was the highest level of seasonally adjusted insured unemployment recorded in the history of the data, the government said.

Likewise, the advance seasonally adjusted insured unemployment rate of 8.2% for the week ending April 4, a weekly increase of 3.1 percentage points, was the highest ever in the history of this data. The previous high was 7% in May of 1975, the Labor Department said.

The jobless-claims report came out at the same time as March housing starts and the April Philadelphia Federal Reserve manufacturing index.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.