Two weeks ago it was a record 3.3 million initial claims; last week it was an additional (upwardly revised) 6.875 million in initial claims, and this week another 6.606 million claims (almost exactly our expectation of 6.5 million).
That is a shocking 16.78 million people who have applied for unemployment benefits in the last three weeks.
Source: Bloomberg
And of course, last week’s “initial” claims and this week’s “continuing” claims… the highest level of continuing claims ever
Source: Bloomberg
Put another way, we have lost 1132 jobs for every confirmed US death from COVID-19 (14,817).
This is simply stunning.
“The U.S. labor market is in free-fall,” said Gregory Daco, chief U.S. economist at Oxford Economics in New York.
“The prospect of more stringent lockdown measures and the fact that many states have not yet been able to process the full amount of jobless claim applications suggest the worst is still to come.”
And another important note is that weekly jobless claims data are based on “hard facts”, UBS points out, unlike survey data
which is subject to quirks around:
a) some of the treatment of supply chains, which has flattered data,
b) the fact that many respondents will not be replying to surveys during the virus disruption period, and
c) survey data will give more accurate assessments during ‘normal’ times, perhaps not as much in unusual times.
Of course, the government is coming to the rescue. As a result of the freshly-passed ‘relief’ bill, self-employed and gig-workers who previously were unable to claim unemployment benefits are now eligible. In addition, the unemployed will get up to $600 per week for up to four months, which is equivalent to $15 per hour for a 40-hour workweek. By comparison, the government-mandated minimum wage is about $7.25 per hour and the average jobless benefits payment was roughly $385 per person per month at the start of this year.
“Why work when one is better off not working financially and health wise?” said a Sung Won Sohn, a business economics professor at Loyola Marymount University in Los Angeles.
With more than 80% of Americans under some form of lockdown, up from less than 50% a couple of weeks ago, this is far from over.
Picking up on our analysis from last week, BofA notes that data from Google Trends reveals further pickup in searches for “unemployment benefits” and “filing for unemployment,” which could argue for even more upside from here.
Worse still, the final numbers will likely be worsened due to the bailout itself: as a reminder, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed on March 27, could contribute to new records being reached in coming weeks as it increases eligibility for jobless claims to self-employed and gig workers, extends the maximum number of weeks that one can receive benefits, and provides an additional $600 per week until July 31. A recent WSJ article noted that this has created incentives for some businesses to temporarily furlough their employees, knowing that they will be covered financially as the economy is shutdown. Meanwhile, those making below $50k will generally be made whole and possibly be better off on unemployment benefits.
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Good now all I need to do is LIE about my financial situation and I to can get on the gravy train of unemployment ” benefits”.This is sickening on some many levels. The corruption …well ..the corruption.
Such terrific news. I guess that is why the U.S. stock markets are responding so positively.
So what’s the next move? GovCo taking control of the Fed? If that happens, then debt default is next on the agenda. Where that goes, nobody knows. Keep your powder dry.
Just Sayin’
Gov.corp
It’s amazing people are still trying to keep this system alive. Screw Unemployment. Everybody default! Trade, barter, beg for a little charity….but stop being a slave to this satanic system. BE MORAL! BE FREE!
I hove no job none to be had and Im only 84.
The State’s unemployment fund bail out I was wondering about included in the package. The Treasury $454 Billion levered up, so far.
https://finance.yahoo.com/news/federal-reserve-announces-23-trillion-in-funding-for-households-local-governments-123445078.html
It is just beginning, folks. Expect 40 million unemployed before gov.com decides to let businesses open again. Of course, nobody will have any money to spend, so we will see a rush to bankruptcy court.
As long as the Blue cities and states take the worst of it, I hope this never ends.
The Courts are closed, fucked, and there is not enough lawyers in America to fix the backlog of criminal and civil cases already. Again- as long as the Blue cities and states take the worst- this is a good thing.
A great thing.
The only bad thing about this hitting the blue states the worst is they pretty much force their insane ideas on the rest of us.
It will all be over soon! So say the stars.
14 year old Abighya Anand, predicted that the world will enter into a tough phase starting November 2019 to April 2020.
https://news-af.feednews.com/news/detail/81b14a8a38c5848b6fe3a1b346483803?client=news&fbclid=IwAR0QomqBzTZhufLIR7TARcPT49sIdRC0_BB-0s96JrcY-lQF1yEj7AdMJ3o
Well, when what 90% of the job gains over the last 12 years were bartenders and wait staff, what could go wrong?
Don’t forget those in the gig economy. They make up a large portion of new jobs the past couple of years.
We seem to have an entire generation that really does not understand the concept of moral hazard. Human beings are not particularly moral to begin with, but when government steps in and rewards people for making poor decisions and makes being unemployed more lucrative than being employed what do they think is going to happen?
People had better get used to the concept that things are not going back to where they were, because where we were was not sustainable.
The economy was showing all the signs of recession before the virus began, but having this happen the way it has is the worst possible scenario. It is the perfect economic storm. Overvalued assets, no savings, astronomical debt, and now the complete shutdown of the world economy.
The rise in the stock market over the past few days shows the level of delusion people have allowed themselves to enjoy.
The Fed cannot save this and neither can the Government. Do the math. Look at how much money is being lost. Look at how many bills and payments are not being made. Look at how ridiculous asset levels are.
When I was a young man, I was taught to never make a “scared money decision”. A scared money decision is one you make from a position of weakness because you lack the strength and staying power that a strong cash position provides. Today we have the whole world making scared money decisions, and it is not going to end well.
“Today we have the whole world making scared money decisions”
well not the whole world. are the money printers ever scared?
They are afraid, they are afraid when their scheme does not work, they could be lynched.
are the owners of the fiat debt dollar scheme accessible?
17 million unemployed
divided by
16 thousand Wuhan Plague ‘cited’ deaths
equals a nation of suckers
There was a time when America met troubling times head on.
Now America runs and hides because the Gov said “Boo!”.
No need to take what a society offers up for free.
Some are already crying out their shackles are too loose.
I don’t believe that number. I never believe their unemployment numbers. They lie about everything.
Other than that it’s probably a interesting topic to guess at.
What does it even matter anymore? Most of us knew that locking the country down for a virus was going to end the country as we know it.
I’m not going to hold my breath waiting for those in favor of it to admit that they were worse than wrong. Denninger was sayig that 1132 folks have lost their jobs – likely to never get them back – for every one covid-19 death. And that’s including mistaken causes of death.
“We can’t simply pull kids out of school for three months, add 6 million to unemployment in a few weeks, and pit the population against one another in a battle for personal space where they think defeat potentially means viral death, and expect there not to be long term damage.
Governors, mayors, and police are making threats and wielding massive amounts of “emergency powers” at citizens. In Maryland the Governor is justifying arrests for violators of his “social distancing” order.
In Kentucky, two circuit court judges have ordered infected persons to wear ankle monitors for breaking quarantine
A wave border, literally in the ocean without another person in sight, was arrested – which required police to lay hands on him – in Malibu this week. How, in this case, does exposing police officers, jail guards, and other prisoners to potential infection help the problem? I don’t know – however, it is a great example of how when it comes right down to it, all government amounts to is FORCE. That’s what it does. That’s all it knows how to do.
When you ask for government – whether it’s a tax, license, plastic straw ban, or nationalized health care – it comes with guns.”
https://freebeacon.com/coronavirus/senate-dems-block-emergency-relief-for-small-businesses/?fbclid=IwAR06siEufSobzFyzU6RnTGDQqgro1cGFWA36YHroNNfQHsl-6Wt_TKbM-E8