Last week, America witnessed the largest spike in jobless claims in recorded history, as 3.28 million people filed for unemployment benefits amid mass layoffs associated with the lockdown measures put in place to contain the coronavirus.
Calling the figure a “record” understates the case.
That number recalibrated the y-axis – literally. We sailed into uncharted waters – and then right off the edge of the world. The figure was quadruple the old high mark.
Unfortunately, it’s going to get worse. Or at least according to some estimates.
The median estimate for jobless claims in the week ended March 28 is 3.5 million, larger than last week’s mind-boggling surge, but the distribution is highly amusing. Have a look:
Way over there in the right tail is a projection from Banque Pictet & Cie. That forecast is 6.5 million.
In case you’re having trouble imagining what that would look like on a longer-term chart, I’ve taken the liberty of plotting it, along with estimates from Goldman, Citi and the median. Feast your eyes on this:
Now that is quite something.
For obvious reasons, the claims figure has become one of (if not the) most germane indicators for market participants. Indeed, you could easily argue that Thursday’s print will be far more important than the next day’s payrolls report.
On Monday, Maryland joined the list of states instituting a stay-at-home orders.
“Some people are still choosing to ignore executive orders and directives. Those individuals are endangering others”, Gov. Larry Hogan said, at a news conference. “Those ignoring the directives are in violation of state law”.