Thursday, May 7, 2020

Initial jobless claims continue to be (less) horrible

 - by New Deal democrat

On a seasonally adjusted basis, initial jobless claims last week declined to 3.169 million. That brings the total number of new jobless claims over the past 7 weeks since the coronavirus crisis started to 33.5 million. Because seasonal adjustments are probably distorting the actual numbers substantially, I am including those in the below graph in red as well. They totaled 29.9 million in the past 7 weeks:

We know that many people had been unable to file due to State systems being overloaded or obtuse. It is not clear how many are still unable, or have given up trying, but it is likely that the total number is significantly higher.

Continuing claims, with a one week delay, rose to 22.647 million:

Now that we have a solid month of initial claims since the coronavirus crisis hit, we will have a basis on which to compare month/month levels to see if they are bottoming, rebounding, or continuing to worsen. 

In particular, it is likely that from here on out, new initial claims are likely to represent “second order effects” of the virus. In other words, the shutdowns in some sectors of the economy will likely lead to a collapse in demand for some products and services in other sectors not directly affected (e.g., layoffs in the media because advertising revenue has dried up).

In the meantime, tomorrow we will get an absolutely horrible jobs number.