Another week, another deluge of jobless claims, as millions of Americans file for unemployment benefits amid the ongoing coronavirus crisis.
Sadly, this is the new reality for the country, and the risk is that the fortunate among us become numb to the data – that we forget there are people behind the numbers.
For what it’s worth, the latest jobless claims data is slightly better than feared. Economists were looking for 4.5 million on the headline. In fact, the figure is 4.43 million, a stunning number by reference to any historical precedent outside of the current deep recession. The previous week was revised slightly lower to 5,237,000.
Last week marked a second week of falling claims, even as the absolute number of filers remained some eight times larger than the pre-coronavirus crisis record, set in 1982. For optimists, the downward “trend” (if you can call two weeks a “trend”) meant the country may have already seen the worst on March 28. The latest figures suggest the downward trend is intact.
Hopefully, the Paycheck Protection Program (which was maxed out earlier this month and topped up this week) will mean employers are able to rehire workers and keep those who haven’t been let go on payroll.
The five-week total (which captures the effect of the lockdown measures put in place to curtail the spread of COVID-19) is now around 26.5 million.
Assuming the recession began in Q1 of 2020 (i.e., taking December’s non-farm payrolls report as the last data point), the US created around 20.5 million jobs over the longest expansion in history which, going by the NBER’s official start date, began in June of 2009.
As discussed last week, America has now seen the entirety of those gains effectively wiped off the board. Updating the visual shows a large net loss.
That is by no means a definitive assessment, and there’s quite a bit of implicit extrapolation, but it helps to put the last five weeks in perspective.
Speaking of perspective, here is an updated visual that shows the comparison with the previous record for weekly claims.
All one can do is hope that the virus curves continue to flatten across America and that decisions to reopen high-contact establishments in some states don’t lead to a second wave of infections.
“Moving too quickly and having to step backward will hurt a lot more than being cautious now and, potentially, do a lot more economic damage than already being experienced”, former trader Richard Breslow wrote, in his Thursday missive. “Talk about a potential blow to morale. There might be light at the end of the tunnel, but we’re still in it”.
