The stock market opened with losses Thursday after new data revealed that 4 million Americans filed new applications for unemployment insurance last week as the coronavirus pandemic shatters the U.S. economy.
The Dow Jones Industrial Average dropped more than 300 points Thursday, falling 1.3 percent in an hour after the Labor Department reported that 3.8 million Americans filed their first claims for jobless benefits last week. Last week’s claims brought the total number of Americans who’ve applied for unemployment benefits in the past six weeks to 30 million, roughly one-fifth of the U.S. workforce.
The S&P 500 fell 1.2 percent while the Nasdaq ticked down 0.5 percent.
After crashing in late February and through most of March as COVID-19 seized the U.S., stocks have gradually recovered despite the steady rise in coronavirus cases across the country and the economic devastation left in its wake.
President TrumpDonald TrumpSix big off-year elections you might be missing Twitter suspends GOP Rep. Banks for misgendering trans health official Meghan McCain to Trump: 'Thanks for the publicity' MORE has nudged states with smaller COVID-19 outbreaks to begin lifting parts of social distancing orders imposed to slow the spread of the pandemic at a dire economic cost.
The U.S. economy shrunk at an annualized rate of 4.8 percent in the first three months of 2020, according to an advance estimate released by the Commerce Department on Wednesday, and may fall as much as 30 to 40 percent in the second quarter.
“We're going to see economic data for the second quarter that's worse than any data we've seen for the economy, and they’re a direct consequence of the disease and the measures that we're taking to protect ourselves from it,” said Federal Reserve Chairman Jerome Powell on Thursday.
Some governors, including those in states with rising coronavirus cases, have begun to reopen certain businesses under lighter social distancing rules, fueling Trump and his advisers’ optimism for a swift rebound.
Economists, however, warn that the U.S. is unlikely to return even tepid growth until a successful treatment or vaccine for COVID-19 is widely available to give Americans confidence to dine, shop and gather without fear.