2.1 mln US workers seek jobless aid last week, lowest since mid-March

Initial jobless claims totaled 2.1 million last week, down from 2.4 million filed the previous week and the lowest number since the coronavirus pandemic shut down the economy in mid-March, the US Labor Department reported Thursday.

The number of new claims continues to decline, but last week's total topped the 2.05 million expected by Wall Street analysts.

The number of workers filing jobless claims peaked at 6.9 million in the week ended March 28, and has fallen to about 2.5 million or less in recent weeks.

Nevertheless, a total of 40.8 million workers have filed unemployment claims in the last 10 weeks – the largest number in history.

The unemployment rate, or those collecting benefits compared with the total labor force, fell to 14.5 percent from 17.1 percent the previous week.

However, the number of continuing claims by workers who have collected unemployment claims for at least two weeks fell last week by 3.86 million to 21.05 million.

Prior to this year, the record was 6.5 million continuing claims filed in 2009 close to the end of the last recession.

The continued decline in initial jobless claims and the drop in continuing claims may suggest the worst of the economic downturn is over as the economy begins to reopen.

But a full recovery in the labor market will take months and perhaps years, analysts believe.

Service jobs appear ready to rebound as the economy reopens.

Las Vegas casinos plan to reopen next week. Disney resorts hopes to reopen in July. Retailers in New York and Los Angeles plan to reopen gradually as restrictions are relaxed.

In early trading Thursday, the Dow Jones Industrial Average rose 27.75 points, or 0.11 percent, to 25,575.58. . The S&P 500 gained 0.09 percent. The Nasdaq Composite tacked on 0.06 percent.

On Thursday, the price of West Texas Intermediate crude, the guide for US prices, rose 0.21 percent to $32.90 a barrel. Brent crude, the worldwide benchmark, added 0.28 percent to $35.55 a barrel.

On Wednesday, the Dow gained 553.16 points, or 2.21 percent, and closed at 25,548.27, it's highest close since March when the effects of the coronavirus pandemic first ripped through the economy. The S&P 500 rose 1.48 percent, it's highest level since March. The Nasdaq Composite edged up 0.77 percent.

The rally reflects optimism as the economy reopens. Traders are betting the worst of the downturn is over and look for a rebound.

Shares of companies that are likely to benefit from re-starting the economy have rallied, including retailers Nordstrom, Gap and Kohl's. Investors are bullish on airlines as bookings exceed cancellations in many cities. Alaska, American, Delta and American Airlines have gained this week.

But stocks that benefited during the lockdown took a hit, including Amazon, Shopify, Teladoc Health and Zoom Video.

But airlines still struggle to cut costs and overall demand, while increasing, is still far below pre-pandemic levels.

American Airlines said it plans to cut about 30 percent of management and support staff, or about 5,000 jobs due to the coronavirus pandemic.

The company plans to offer buyouts to flight attendants and other staff members.

"Although our pre-pandemic liquidity, the significant financial assistance provided by the government, and the case we're raised in the capital markets provide a foundation for stability, we need to reduce our cost structure, including out most significant expense – the cost of compensation and benefits, Elise Eberwein, American's vice president, said in a note to staff.

American Airlines will pay those who accept the buyout one-third of their pay through the end of 2020 and provide five years of travel privileges. Workers laid off after October 1 won't receive severance, CNBC reported.

The company had about 130,000 employees at the end of 2019. So far, about 39,000 have taken early retirement or left voluntarily.

Airlines last month began to receive funds as part of a $25 billion federal aid package. Companies that accepted the federal aid can't lay off workers or reduce pay through September 30.

In early trading Thursday, American's stock fell 5.01 percent.

In a preliminary report, Macy's said it expected first quarter revenue of $3 billion to $3.03 billion compared with Wall Street estimates of $3.3 billion. The company also expects to report a larger than expected loss due to store closures during the shutdown, but expects to reopen most stores by late June.

In early trading, Macy's stock fell 2.52 percent.

Medtronic, a maker of medical device, said earnings fell short of Wall Street estimates due to the decision to delay elective surgeries during the coronavirus pandemic. The company didn't provide earnings guidance due to continued uncertainty, but boosted its quarterly dividend by 4 cents to 58 cents a share.

In early trading, Medtronic's stock gained 1.57 percent.